0:36 Intro. [Recording date: April 25, 2012.] Russ: Economic justice: We are going to talk about John Rawls, Robert Nozick and the notion of economic justice generally. Let's start with John Rawls. His book, Theory of Justice, was published in 1971. Talk about that book. Guest: It begins with Rawls trying to set out a theory of justice, and he sees theorizing about justice as a project of modeling a kind of fairness, like different things can be fair, and evaluation can be fair or not, and shares can be fair or not. So, Rawls is giving us a theory about what would make shares fair. And the obvious first thing to say, which is the first thing he says is that the fair way to divide a pie would be into equal shares. But he said, there is in some theoretical way another alternative; so suppose that the pie's size is variable and that how large the pie would be, would be in part a function of how we decided to divide it. So, different ways of dividing it, possibly unequal ways of dividing it, would lead to a larger pie. And could conceivably lead to larger or smaller shares, but a pie so large that even the smallest share is something that is a larger slice than an equal share would have been of the smaller pie. And so that's the original driving motivation of that theory. So, he comes up with a principle of maximizing, maximum equal liberties for all; but there's also a principle for distributing--it's interpreted as a principle for distributing goods. But that's not literally what it says. It says you distribute inequalities in such a way that even the least advantaged ends up more advantaged than would be possible under a more egalitarian scheme. That principle is called the difference principle--distribute inequalities so as to be to the greatest advantage of the least advantaged. Russ: So, the idea would be, if it didn't affect the size of the pie, equal shares. But we are willing to tolerate inequality as long as it improves the well-being of the worst off. Guest: Improves the well-being of everyone, including the worst off. Russ: Oh, including. Guest: Yes. Well, interestingly, the first two statements of that difference principle, before 1971, actually said it in that open-ended way: make sure that the inequalities are to everyone's advantage, including the least-advantaged. Now, by 1971, he's actually changing his story, in a seemingly subtle but in fact momentous way. He says: Well, actually there are indefinitely numerous solutions out on that frontier of welfare that would be compatible with that principle, innumerously different, unequal distributions that would be good for everyone; so he said: So, what we've got here at best is an incomplete ordering principle, and we need something that's complete. And so we have to define a principle that picks out a definite spot on that frontier. So he says: Well, let's pick the spot on the frontier that is to the greatest advantage of the least advantage, so that the smallest share is as large as it possibly can be. Now, that is an intuitively obviously principle to pick. Russ: If you thought it was crucial to have a solution. It's not clear that that is ideal, per se. Guest: Well, that's a good point. And in fact, what I would say is, it isn't the job of a--this is a basic structure we are talking about defining, and it isn't a basic structure's job to pick out a particular outcome. I mean, the reason we want a set of traffic-management tools and policies, the reason we want to agree that red means stop and green means go, is that we want to minimize the cost for everyone, including the least advantaged, of getting to their destinations. So, the point isn't to be maximally advantageous; the point isn't to get everyone to the same destination. And you'd think Rawls would not have said that either; he would agree with that. But yet this idea that we need to pick a specific outcome is, I think, a subtle but major turn in a wrong direction, I have to say; that the point of basic structures is to put us in a position where we can pursue our own plans in a way that isn't threatening to each other. But to do this, it put, as Nozick is going to come along and say, in 1974--that puts people in a position where the rest of us are supposed to think our job in life as people committed to justice, or the job of our basic structure, anyway, is to make sure that those other folks out there are made so well off that if the system tried to do anything better for them, tried to do more for them, it would end up being less. Russ: Couldn't do it. Guest: Nozick says that is just an amazing thing to expect of a system of justice in forming basic structure that is supposed to respect us all as reciprocators and is supposed to treat us all as inviolate separate persons who come to the community with hopes and dreams of our own. Russ: Of course, not everyone accepts that; but I happen to like that one. And obviously Nozick thought that was crucial. Guest: Rawls did, too. Russ: We'll come to Nozick in more detail in a little bit, but let's still stick with Rawls. Tell us a little bit about Rawls--his background and interests. You mentioned before we started the interview that he hung out with a lot of economists. Which I didn't realize. Guest: Yeah. Among his friends were James Buchanan, Ken Arrow, William Riker, Amartya Sen. And these folks were different generations, too. But that was a group of people that formed--these were Rawls's friends and mentors, his discussion group. These were the people that he bounced ideas off of. And so the young Rawls was very much conversant with this developing field, rapidly developing at the time, field of political economy. Very much versed in the game theory and the welfare economics of the time. Very much educated in this and very sensitive to it; and very keen to bring the insights of that field to philosophy. And very successful at bringing those insights to philosophy. He lifted the profession out of a state--I think single-handed would be, well, historically inaccurate, I suppose--but I think it would be fair to say that Rawls more than anyone else kind of broke the equilibrium in which moral and political philosophers were basically saying: Well, there's some kind of dialectic of historical materialism and it doesn't really matter; we can't do much about that anyway as philosophers; it's not our job. Our job is to define terms. Or better yet, get somebody else to define terms and then we can poke holes in their definitions. He who defines a term first loses the game, basically. That was the game at the time, to just think about consistency; not worry about truth , not worry about empirical correlation. So, in effect, not worry about practicality. So, philosophy had almost proudly come to a state where it had nothing to say about politics. Or ethics, for that matter.

10:00 Russ: Now, one idea that I think people have heard of from Rawls--I'm looking, I'm sitting in my office doing this interview face to face--and I can't quite see the full section of the Rs on my bookshelf, but I once owned a copy of The Theory of Justice. I may still own it. I have read maybe half of it. It's a hard, fat book. It's not easy going, so I appreciate the help. But one idea that I remember, and I think many people have heard of, is the Veil of Ignorance. Describe what that is and how it entered Rawls's formulation of justice. Guest: It's a hard book for anyone. It's a long book, and it's a very sophisticated book. He's pulling together a very large number of threads of philosophy and political economy, trying to pull them in and weave a fabric out of them. So, it's not your fault. Everybody who takes the book seriously has trouble with it. It's just full of insight. But if you think about how we get to that task of dividing the pie and really the prior task of getting the pie to the table in the first place--which I don't think he does enough to talk about that. He's talking about people as separate agents, separate persons, separate producers, and respecting their separateness in a way that utilitarianism fails to do. And part of my problem is--he goes on later, as he's divorcing himself from the political economists that formed his early discussion group--he's going on to talk about, say, the distribution of talent, and saying: Well, here's why we would originally go for that semi-egalitarian distribution that we'd only want to depart from egalitarianism--strictly equal sha res--if we could do so in a mutually advantageous direction; the obvious answer would be: well, I've got talent. I've got something in me; I've got something I want to bring to the table and I want to bring to society. But I want to be the first person who makes money from it. I want to--Adam Smith would say--I want to be esteemed for this. And I want to make money for it. But the point is, some people say, actually, I have premium talent. As a matter of respecting me as a separate person, I want to be paid a premium price for my premium talent. And Rawls would say: Well, that's a problem; I understand the intuition that people deserve to be paid what they are worth. They deserve the marginal product of their creative output and so on. But Rawls says: That's not the direction we are going to go in. We are going to go in the direction of this difference principle that starts with equality and only departs from it for the sake of giving everyone a larger bundle of primary goods. So, it's not about giving people what they deserve. It's about giving people somewhat better than an equal share. So, he says, this would be more intuitive if we imagine ourselves in a fair situation, where we don't come with our biases about how talented we are and how much more we should get paid than the Joneses and so on, so the thing to think about is to imagine ourselves bargaining in a situation where we don't really know where our personal interests lie. So, for example, we may think: Shouldn't someone who can throw a baseball 100 miles an hour get paid more than someone who can't? Shouldn't they in fact be paid millions of dollars? And you say: That isn't obvious. But however we decide that question, let's not let the pitchers decide it, and let's not let even the fans decide it. Let's have people decide it without knowing whether they are pitchers or people completely indifferent to the whole sport and would not watch an inning of that game to save their lives. So, get everybody in the room, get all the people representing, anyway, every perspective in the room; and have them make that decision in a truly impartial way. So the point of the Veil of Ignorance is to say to people what you are supposed to be imagining is, if you don't know who you are. So, there's x, y, and z; there's some guy out there named Russ Roberts, but you don't know that you are Russ Roberts. How much do you think Russ Roberts should get? And if you decide here's what Russ Roberts should get and you don't know that you are Russ Roberts, well then the answer you come up with will be a lot more impartial than if you do know that you are Russ Roberts. So pretend you don't know who you are. Russ: Yeah; it's actually--using the word impartial reminds me of Adam Smith's Theory of Moral Sentiments, where he often invokes the impartial spectator, a person who is impartial in, say, a dispute where two parties are angry at each other, or one who is seeking vengeance or one who has been offended. And since that impartial spectator doesn't have the emotional baggage and the bias of the participants, that's the exemplar we should turn to for how to behave in that situation. There's something of that in Rawls, right? Guest: Uh, yeah, absolutely. These are certainly fellow travelers in a tradition. Rawls belongs in more than one tradition; but the contract carrying tradition is something he has links to, and the moral sympathy tradition is something that he has links to. Russ: Now, of course, one of the problems with the Veil of Ignorance--your mentioning James Buchanan brings it to mind--is that there's no such thing as Russ Roberts when you are behind the Veil of Ignorance. There's no such thing as baseball behind the Veil of Ignorance. It's an interesting, perhaps, intellectual experiment to say how much should a bricklayer or a blacksmith or an auto worker earn if I don't know if I'm going to be that person. We take those as given in the exercise, but of course they emerge through the choices people make and the skills they have; and they all depend on the skills of the other people. So you can't even say how much should a bricklayer earn. How much should a blacksmith earn? Well, there aren't any blacksmiths any more. How does that affect our calculus? Or, we could ask the question: Well, how much a blacksmith might earn might depend on a thousand, millions of other people in the society in 1850, and what their skills are. It's an interesting suspension of disbelief, I guess, and requirement of knowledge you can't have. Guest: Yes. I guess, so James Buchanan would say we start from here. Russ: Where's here? Guest: Well, here is in the world of Russ Roberts and baseball. Russ: Yeah. Guest: And in a way I think Rawls would say: That's my theory, too; I don't disagree with that. But he would say: We don't want to start off with our epistemology situated in that world. We still want to come out of this with conclusions that are relevant to the world of people actually living. But in a way we don't start our theorizing from here. We say: Suppose we were starting from nothing; what would we build? Now, if you think about the kind of theorizing we are doing there, that will not have had at any point at the end of the day, it will just have been an idle exercise, if we don't come out of it with stuff that applies to the real world of baseball and Russ Roberts. So, when we say we are behind a Veil of Ignorance, we are not supposed to be imagining that nothing exists, that we are making a decision in a void. Russ: We are in some kind of shrouds, or togas. Guest: But at the end of the day I'm going to walk out of the door being Dave Schmidtz. But I'm trying to say to myself: If I didn't know that I was who I am and I didn't know that talents were getting rewarded like that, or I didn't know that I would have talents like that, or I didn't even know that I was particularly willing to take on risk--I knew the general facts of human society, I knew principles of economics and sociology and psychology. But I wouldn't really know anything that had a bearing on making my payoff, the particular payoff that it did. So, it really is a thought-experiment. It's not meant to be theorizing about a different world. It's meant to be theorizing about our world, but meant to make us kind of envision what it would be like to be looking at our world impartially.

19:37 Russ: I think it's a powerful, really thought-provoking idea. Guest: Probably in philosophy it was the most provocative idea of the 20th century. Russ: And the book itself, the rest of the ideas, what were its impact? One of its impacts was that it encouraged Robert Nozick to write a different book than Rawls had written. But before we talk about Nozick specifically, what's been the impact of The Theory of Justice, Rawls's book? Guest: Well, it's hard to say. It's certainly changed the profession of philosophy. It probably changed the Academy--the social sciences--quite generally. As to what has had a larger impact outside of the Academy, there probably hasn't been anything more influential than Peter Singer's conversations about animal welfare, and so on, animal experimentation and factory farming. Whereas Singer has had relatively little influence within the Academy. But Rawls has been much more influential inside the Academy, I think, by far, than any other philosopher in the 20th century. But I think he's really shaped thinking. I mean, the thinking was going to really change anyway, to what we don't know, but he's taken a profession that had really gone into navel-gazing mode and started talking about: We're going to define terms and come up with consistent definitions of terms. And he took that and dragged it into, instead, a state where philosophers were talking hard about what to do about practical affairs. What's the right thing to do? What can we at least single out as what can be condemned or something like that? So, Rawls, had, in a way, relatively little to say about global justice, for example; but he's had many, many students who have gone on to say: Well, given that this idea is as striking, intuitive, compelling as it is, that we should be trying to do as much as possible for the least advantaged, given that the least advantaged are actually on the other side of the world, like do they count? Are they part of this equation? Are they part of the group we are talking about? Are their advantages on a par with the disadvantages and advantages of the poor in New York? Peoria? Tucson? Russ: Yeah. It's a good question. Guest: Some people are working on that now. They are working on it to some degree because of Rawls.

22:46 Russ: Let's turn to Nozick. 1974, he's a colleague of Rawls at Harvard, and he publishes Anarchy, State, and Utopia. A book I also once owned. I don't see it on my shelf. You see it? Guest: Yes. Russ: Well, that's a relief. It's still here. And I have read the whole thing. I read it I think when I was 20--or 21?--20. Guest: The kind of person who would steal that book probably has an inordinate respect for property rights. Russ: Why do you mention that? Guest: Well, that's why it's still there. Russ: I'm not sure what you mean. You are wondering why no one has wandered in and stolen it. I don't think anyone stole my Theory of Justice. It may have, I don't know--hang on; let me just eyeball it. I get your joke now. Slow on the uptake, being the non-philosopher in the room. So, you are suggesting my copy of Rawls has walked. I suspect I lent it foolishly. And there is some moral complication to that issue. Guest: It was assisted walking. Russ: Yeah. Anyway, I was electrified by Nozick, when I read it. Of course, I wanted to be. Guest: It's a great book. Russ: I was on his side. It bristles with creative and interesting ideas. And it is not, in my view, as systematic as Rawls. Which makes it a more entertaining read, but a harder take-away sometimes, as a whole. So, what did Nozick try to do in that book, and how does it relate to Rawls? Guest: I think it's a little bit unclear, might have been a little unclear even to Nozick, what he was trying to do. But there are three parts of it. And the biggest second part of the book was more than anything else a response to Rawls. And so there he is setting out an alternative perspective on justice and distributive justice. People say that Nozick didn't have any premises or foundations, and that's just not true. But what is true is that he borrowed his foundations from Rawls, to a large degree. He said: Well, suppose Rawls is right, that people are separate persons with lives of their own to live and that their utility, it isn't up to somebody else to decide how their utility trades off against someone else's. They have rights. And the aggregate isn't a trump. So, maybe that's question-begging. But if that's question-begging, then Rawls is question-begging, because that's Rawls's premise; and Nozick said: Suppose that's right. Suppose we took that on board and really believed it. I don't think we are going to get Rawls's conclusions if we do that. I think if we take that premise on board, what we are going to actually end up with is a puzzle about how to justify the emergence and enforcement of a state-imposed rule of law in the first place; but also in an ongoing way. So, he comes up with different categorizations of principles of justice and with the tasks of forming an order out of principles of justice. He distinguishes between historical and patterned principles, and he says that Rawls's theory is actually a patterned principle, based on a patterned principle, the difference principle, and that is, Nozick wants us to consider an historical alternative. Russ: Which is? Guest: Well, let me set out the distinction from the ground, then. So, you might say, a principle, say--he distinguishes between the idea of current time-slice principles, where he says you would evaluate the justice of a situation by looking at a snapshot of the situation and saying: Are the shares the right size in that situation? You don't care how the shares got to be that way. You don't care who produced what. You just look at the shares and you say, for example: Well, if the shares are unequal size, then that's that. That determines that the distribution is unjust, is illegitimate. Russ: That's Nozick describing Rawls. Guest: Yeah. In effect. Russ: Because Rawls ignores how they got there.

28:06 Guest: But he's [Nozick's] saying: Here are the possibilities, basically. So, the two basic categories he wants to talk about are historical and time-slice. But it's actually a little bit harder and more complicated than that. So, you could also distinguish between a more time-sensitive or context-sensitive principle, which, call it an end-state principle--that's what Nozick calls it--where you might not exactly take a snapshot and say unequal shares entails injustice ; you might say: Actually we should be looking at lifetime income, say. And if the Joneses and Smiths have the same lifetime income, then that is equal in the way that justice requires the outcome to be equal. And so even if the Joneses and Smiths have different incomes at a particular time or different net wealth at a particular time--because, after all, Jones is 20 and Smith is 50 and Smith has been accumulating both talents and skills and connections and wealth for 30 more years than the other has--then that would be inequality and injustice by the lights of current time-slice principle, but the end-state principle says: No, that's not the point. The snapshot isn't the point. The whole picture is the point. Now, pattern principles, then, are principles that say we have to look we have to look at a particular pattern. And the pattern might not actually be like slices of a pie. It might be a pattern of treatment. So, you might say: Are those people doing worse than others because there is a prejudice against hiring people of their minority group or their religious group or people of their sex? And so you might say: That might be where we'd locate injustice. You'd say there's a systematic pattern of inequality here. Even if people actually had the same income, you might say: Well, those people had to work twice as hard for it; or, those people had to wait twice as long for it. So there can be a pattern of justice that's a more subtle thing. And Nozick says: Okay, that's more plausible; but it's still not my theory. It's still not a historical theory. Historical theory: there are rules about how you come to own something. And the main question is going to be: Did you acquire that by using force? Or did you acquire it by voluntary consent? If anybody who had a claim to that baseball ticket said: Hey, give that to Russ. For whatever reason. Maybe he paid for it; maybe he's just more of a baseball fan or something like that. Maybe it's your birthday. Something like that. Russ: Or the current holder is not a nice person. Guest: Well, could be. Lots of different transfer principles we could talk about, too. But basically, Nozick said: No matter what the result is, the result isn't where the rubber hits the road. The result isn't where the justice question gets resolved. The justice question gets resolved when we look at how the transfer actually occurred; and did the transfer occur legitimately. And Nozick says the pre-eminent principle of legitimate transfer is consent. Russ: So, if you have the ticket and I ask you for it and you give it to me voluntarily, versus I hold you up at gunpoint for the ticket, the second case even if I'm the bigger baseball fan, is irrelevant because, is unjust because I used force. And the first case, even if I'm the smaller baseball fan, is just because you gave it to me. Guest: Yep. Russ: Or I bought it from you. But it was voluntary.

32:15 Russ: So, the problem with that, which I'm sure people--I can't remember, Nozick talks about it in the book--is that many of our advantages in life, and of course this has become a huge study in economics recently , are given to us. We don't earn them. My children are born in the United States. They are born in the United States of a certain parental endowment of genetics and environment. The odds are good they are going to be above the median in material well-being. They may not. They may choose a path that's less rewarding materially. But it's certainly open to them to be well above the median if they choose to be. Is that fair? Just because it's voluntary--they didn't steal it from anybody? What's Nozick's answer to that? Put the stress on voluntary exchange, versus expropriation. Guest: Let me kind of start at the start, if you don't mind. Nozick is working in a Lockean tradition, trying to develop an alternative to Rawls's theory. And so Locke is starting out responding to a fellow named Lord Filmer, who basically said all the earth was given to mankind in common. But, no, that can't be right; because if it were the case that we all were common owners, then nobody could do anything. We'd all be paralyzed. We wouldn't have the right to take a breath or to stand, even just to simply stand our ground without getting the permission of everybody else in the human race to stand there. So, Filmer says that can't be right, and therefore it can't be the case that God gave the world to all mankind; God gave the world to Adam and then Adam passed it on to his children. And that's how it ended up in the hands of Adam's distant descendants--namely today's kings. Russ: Us. Guest: No, the kings. Russ: Not us. Guest: So, Locke made fun of that; he mocked that. But he also came up with a pretty sustained argument against that. Now, Locke didn't talk about us appropriating our talents, per se. What he talked about is appropriating land. But Nozick comes in understanding that we need to have some kind of theory about how we originally become the owners of anything at all. Now, there's this principle which we already talked about, a principle of just transfer; so if that ticket belongs to me, the way you acquire property in that ticket is by doing justice to the claim that I have prior to yours; and so you do justice to my claim by asking me if you can have it. And I say: Well, what are you proposing? And then you make an offer of some kind; and I say: Yeah, that'll work for me; and then we make an exchange. And now you are the owner of the ticket. I've relinquished ownership. But if we suppose then that my talents--either my talents came into the world as my property or my talents came into the world as the world's property as it were--the human race's property--which actually is more or less like Rawls's theory in the end; but that's what Nozick wants to repudiate. Russ: Rawls's being that it's the world's property. Guest: Yes. So, Nozick basically says: What Locke says there's got to be some way in which we can do things with the world. That is, if this is supposed to be a theory that has something to do with respecting separate persons, then it's got to have something to do with separate persons having the right to sustain themselves, to feed themselves--with the emphasis on themselves, that if they can't even put food in their mouths, well then there's nothing respectful about that. Nothing individualistic about that. That's taking a theory to an extreme that prevents it from ever having anything to do with our world. And so Nozick says we do want our theory to have something do to with helping people solve problems and live lives in this world. So, he says the way we acquire land is by mixing our labor with something to which nobody else has a claim. And that latter part is not a throwaway. That's a really important part of the theory. He's not saying: If I can run out onto your lawn with a shovel and turn over a few scoops then I come to own your lawn. It's like the only way for me to come to own your lawn is by coming up with a mutually agreeable arrangement with you. But if nobody has a claim--if you don't have a claim--then the thing that I do when I dig up a mushroom or plant a row of carrots is, I am investing, I am mixing myself with that land, with that product, in a way that nobody else is. And it's not that that has to be some extremely strong claim being created. The point is it's a unique and exclusive claim. The only way for somebody else to come along, the only way for you to come along later and say, I'll take some of those carrots, thank you, or, I think I'll share that mushroom with you, is by ignoring the similar claim that I've made previously. When nobody else has a claim to it then I'm not ignoring anybody, I'm not mistreating anybody, I'm not failing to respect anyone's separateness. But the person whom comes along second needs to get my permission then, in order to not be disrespecting me as a person. So, it doesn't have to be that strong a claim for it to matter that it was the first claim, and there really would be a disrespect involved, in the same way that any bear understands that if you get to the territory second, that first bear is going to stand there and even if the bear is smaller than you, that bear is going to say: I'm going to fight to the death for this, because otherwise I lose my identity. So, even bears understand that it matters who gets there first. And people understand that, as well. So, the thing about your talents is--in a way, it's very implicit in Nozick, but implicitly the idea is this: I can exploit my talents; I can make use of my talents without making anybody else worse off, without putting anybody else in a worse position; but nobody else can come along and commandeer my talents, can enslave me for example without mixing their labor with something I do think of as mine and I quite reliably and predictably will think of as mine; and that nobody can really avoid thinking of as mine. If we talk about it at all, we will talk about it as mine.

39:52 Russ: Nozick of course gets into the appropriate role of the state, and he comes down, if I remember correctly, arguing that--and I have to confess, although I found it exhilarating at the time, thinking back on it I find it a little less exhilarating in terms of its elegance--but his argument is, because of economies of scale, that the state has the authority or justness of performing a police function. But I want to step aside from the many things we might argue and discuss what the state could do, and just focus on the one, which is redistribution. So, if the state raises taxes, not for revenue purposes--that's what I want to put to the side--but merely to redistribute income. So, we've got these baseball players who can throw a baseball 100 miles an hour; we've got people with great voices who can entertain and make millions of dollars a year as a result, like the baseball players, actors and actresses with good looks. And I'm going to accept the fact--obviously Nozick thought it was important--that all these people work very, very hard. When you talk about your talents, there is a tendency to talk about your talents as an endowed gift. Some part of it is, obviously. But what a modern athlete has to do to be a successful earner of those high returns is unimaginable, I think, to most casual sports fans. I don't think they realize the amount of work that gets put in, the relentless effort. I'll put a clip up attached to this of one very moving and informative about this. Taking that as a fact, that some people can throw a baseball faster or sing better, are in demand for whatever reason, and that they've combined hard work to get there, is it unjust then to take a share from them and give it to others, against their will, merely to push the distribution of income toward that egalitarian, equal share outcome? I know what Nozick's answer is: Nozick's answer is No. But the average American, when confronted with the veil of ignorance--what do you think that person would say? It seems to me they are just two orthogonal theories. Rawls--would most people, not you and I, say: Well, behind a veil of ignorance I don't know if I'm going to be one of the gifted ones who works hard or one of the gifted ones who squanders talent; I might end up being one of the non-gifted ones; I might have an IQ of a low number and be endowed with a lazy temperament and I am not going to live very well; and I might be a gifted person with tremendous drive, a Michael Jordan or Steve Jobs, and I might end up with multi-millions. Where would justice lie there in the mind of an average thoughtful person? Would they find redistributive taxation offensive or admirable? Guest: So, two perspectives on this. One perspective would be that on the one hand, that pitcher who is excelling now who did something to make something of himself, make something of his talent. So, like you say, the labor is really there. And even some folks on the left, like David Miller, will say: the point wasn't whether the pitcher or Wilt Chamberlain worked extremely hard or took extreme risks. The point is there was a certain amount of work that went into it, and work that, after all, Wilt did, not that somebody else did. And so that is the thing that establishes Wilt's presumptive claim. It doesn't mean that he shouldn't be taxed for various purposes mainly but it does mean Wilt is the one that has such claim of justice that has anything to do with being deserving or merit or investing in creating the talent, bringing the talent to the table. So, that's one perspective. Now the counterpoint to that is a person who will say: Yeah, but in a way you are failing to understand the way in which the community's involvement goes all the way down. So, it isn't just you that worked. It's your parents that worked and your grandparents that worked and actually your parents' employers, your parents' teachers, your parents' grocers, cabdrivers. So, all of society worked to put you in the situation that you are in. Okay, so that's one perspective; that leaves us with a real understanding why people would disagree about this, why it would seem quite intuitive. Both sides of that debate would seem quite intuitive. Now the only thing that I would want to add to that is I would say: Okay, but let's remind ourselves, are we talking about a liberal society-- Russ: When you use the word liberal, you mean classically liberal or modern liberal? Guest: Ambiguous between them. Just a theory that believes that an individual is a real thing. It's not a scholarly, fictitious construct or something like that. There really are people in the world, and people really do have their own hopes and dreams, and people aren't mere pawns; they actually are agents taking responsibility and making decisions. Now, you can say that at the end of the day, society owns people. People don't own themselves. You can say that, and probably say that consistently; but you are not saying something liberal when you say that. So at the end of the day, for a liberal, you have to make sure you are on the right side of this question. When somebody says: Okay, I got it; I wouldn't be where I am today without my teachers and cab drivers and parents and all kinds of other people; but I don't like this deal ; I'm going go home now; I'm going to leave the country, perhaps, if you don't mind. Who gets to say: Sorry, you aren't enough of a self-owner that you don't have a right to say no? Maybe we want your kidney, maybe we want your blood, maybe we just want your labor, maybe we want to restrict what you can do by laboring for yourself and your family. And at some point we say: Well, let's be reasonable and let's go along with this to some extent. But still, there's a fundamental matter of principle, a question that needs an answer at the end of the day, which is: Do I have the right to say No? Do I have the right to walk? Do I own myself? So, the fact that you can think of other people who helped me, or you just imagine--how do you know that I'm not an orphan? Maybe in your imagination all kinds of people helped me. Tell me at what point other people helping me made me your property. Because if there was no point at which I became your property, then excuse me, but I'm going to go home, and I'm going to take all of my toys with me. If you want some of my toys, if you want me to share my toys, treat me like an adult, treat me like a self-owner, and make me an offer. And you might make me an offer that I'm perfectly willing to accept. I might say--and this was the thing you were excluding--yeah, I want to be part of a community, I want a community that has a real infrastructure; in fact, I want to be part of a community where the roads are free. Not that I think that anything is really free; I realize that I as a taxpayer will be paying for the free roads. But the point is, I want to minimize transactions costs because I want it to be as cheap as possible for my customers to get to my store. And so I would rather pay for that in part of my taxes than have to put up a toll road and have my customers have to pay to get to me. So, yeah, I want public goods, even things that aren't inherently public. Russ: Many goods aren't public goods that are provided. Guest: Yeah. So, I'm willing to pay for it; I regard my paying my share for it as a way of respecting me as a separate person; I'm in. You want me to fight for my country and maybe get killed in the process? I hate the thought, but I'm in; I realize that sometimes my share is going to be big. I'm in for my share. Now, you say I should also be willing to regard myself basically as somebody else's property. I should regard my talent as belonging to somebody other than me. I say, No. If we've gotten to that point, I want to get on a plane with a couple of my suitcases and my talent, and I want to go someplace where I'm treated with more respect. And if you are going to stop me, then we've stopped being a liberal society. If we are still a liberal society, then you realize this package of talents is mine. No matter where it came from, no matter how many friends I had or teachers I had, this is my package of goods. Russ: No matter how many public schools you attended. Guest: Yeah.

50:34 Russ: I'm fighting off the urge to end the podcast here because that was so eloquent. But I want to continue. Let me take a different approach to the question. We could make a different set of arguments against progressive taxation. There was a wonderful book--I'm also looking at my shelf; these comments about my bookshelf are a testament to my eyesight, the clutter of my room, and the height of my bookshelves--but, Blum and Kalven, two law professors, wrote a wonderful little book a long time ago called The Uneasy Case for Progressive Taxation, where they tried to lay out an argument in favor of progressive taxation. They made a bunch of different ones and they shot them all down, most of them; and I think the book concludes that the case remains uneasy. They are sort of pro-progressive taxation, but with qualms, is how I might describe it. So, let me make three arguments, if I can remember them--not from their book but from me sitting here talking to you--against progressive taxation. One would be: It's unjust. It's immoral. That's a Nozickian argument akin to what you just made: that you own yourself, you own your property, and taxation, especially for the purpose of redistribution is theft. The second argument would be: it's inefficient. It makes the pie smaller. And this would be a Rawlsian argument. So, Rawls, while in favor of progressive taxation, would say eventually: Well, I'm in favor of progressive taxation, but not to the point where it makes the pie so much smaller that people get smaller shares. The third argument against progressive taxation I would call practical--different kind of practical. And I guess deep down, it's the third argument that I find most compelling, both intellectually and in terms of persuasiveness, as I think about an impartial spectator thinking about our arguments, conversations here. The third argument would be: Well, if I give the state the power to tax people, that power will be abused, because John Rawls is not going to be the commissioner of taxation in this society. And if he is, he's going to end up being somebody different than a Harvard philosopher. He's going to be a commissioner of taxation, and he will be subject to the imperfections of humanity and the special interests that will try to sway him. So when I think about, to speak more generally, about limiting the power of the state, these three arguments work for so many issues. Think about minimum wages, can argue it's immoral--the state has no right to talk about what I can earn or pay. Can argue it's ineffective--it doesn't do a good job in helping the people it's intended to help. Or you could argue, well, when you give the state the power to set wages it's going to do more than that; we're going to be on the road to tyranny. So, when I think about those three arguments, going back to redistribution; I find myself strongestly drawn to the fear of tyranny. Maybe because I'm not behind a veil of ignorance. I'm sitting here earning well above the median; I live a good life; I live in the United States which puts me way ahead to start with; many gifts and blessings, many of them I've worked for, but many of them, as we said earlier, came to me. When I think about it--I have kind of a conflict of interest; in thinking about this, put myself behind the veil of ignorance, my biggest argument against taxation for purely redistributive purposes is that I think that puts you on a road to a very destructive political system. What's your reaction to that? Guest: It's a rich question. Gave me a chance to think for a minute. Well, first of all, your last thing: bias is a real issue. We are scholars and academics, so we both have a moral obligation to be as impartial as we can be, and to be lovers of truth. And it's really hard. We're only human. There are lots of ways that our minds work and gather information. They are inescapable and we wouldn't be better off if we could escape from them--we process bits of information one at a time, and the first bits of information we acquire are going to become the defaults, and it's going to take more energy and so on, and evidence to overturn those defaults. And that results in bias. We can't do anything about that. So, yeah, it's an issue. Two-thirds of my salary comes from the state, so there's a built-in dynamic leading me in the direction of being a statist. Russ: And instead you bite the hand that feeds you. As do I, so oft. Guest: Well, yeah, I guess. Russ: That hand that's doing the feeding doesn't realize it's being bitten. That's part of the problem. But that's another issue. Guest: Yeah, Freud would have an explanation--he'd say, yeah, I'm getting back at my parents or something like that. So, I'm sympathetic to all of these arguments. Certainly there becomes a point where either the amount of taxation or the form and rationale for taxation becomes so egregiously insulting--and threatening--that you are pretty much willing to go to war, to start a revolution, create a new country if that's what it takes in order to make a stand to correct that injustice. I'm sympathetic to that. I'm an immigrant; I'm a naturalized American citizen now and I believe in the principles of the Revolution. But at the end of the day, there's still an issue for me that as a philosopher, that's more like a premise than it is like a conclusion. I can say: Here's where I make my stand, and my colleagues can say: Me, not so much. I don't blame you; there's no particular reason why you have to agree with me on this. We can all be brothers--until you come around to collect your share of my paycheck. But I can see why reasonable people would disagree with this. So, these table-thumping, deeply compelling emotional beliefs about justice and injustice--they don't make great premises for arguments. They are better as conclusions. If you can get them to come out of your arguments, that's interesting. But if you just insist on them, not so interesting. The efficiency thing, I think we're on your turf when we talk about that; I believe that's a really important issue as well. Rawls, as you say, that is a Rawlsian argument; there are people in the world, not to name names, but who would say it would be worth making the 99% worse off if we could just nail the 1% to the wall and finally get our revenge on all those hoarders and greedy, the people who hog most of the nation's wealth. It's not that they produce anything; the way they acquired their wealth was by hogging it, not by creating it. Russ: That's Nietzsche and Ressentiment, which I don't get to say very often at EconTalk, so I thought I'd just throw that in; my college philosophy class pays off finally. Guest: I've read about that; I don't think I've ever attempted to pronounce that word before, certainly not on the radio. Russ: It's about a six and a half, maybe a seven. Guest: Yeah, you get points for Nietsche.

59:23 Guest: Now, the practical thing, your third alternative--actually I think that is the main concern that I have, too. In a way, maybe we are all children now of James Buchanan to some extent. I look back and I see it in Hayek; you can see it in Adam Smith; you can even see glimpses of it in Aristotle. But I think that concern and that awareness that power corrupts and absolute power corrupts absolutely--that has been with us, we've been aware of that concern for many, many centuries. And the idea that absolute power corrupts absolutely--that isn't just a kind of cute way of taking a point to its logical extreme. It actually is, I think a relevant dynamic of real world corruption, that the more power there is available, the more that that power is worth; the more it's worth to acquire that power; and so the more people will invest and the more unscrupulous they will be in doing whatever it takes to acquire that power--the more they will be spend as well as to lie in order to acquire that power. So, I think there really is a powerful reason to take, as Hayek would have said, to take the reasons every step of the way. There's always a reason, even a good reason, to create more power. There's always a problem coming up that hasn't been solved where we think we need a Czar or a committee or an agency--somebody--we need a Cabinet, to solve that problem. Like the reasons for doing it will probably never be without weight, without merit; and yet the result of creating more power in order to solve that problem is you create more power that gets bought and sold and auctioned off to the highest bidder, in effect, and used for whatever purposes that high bidder has in acquiring that power. So, you end up, the Bills come out with nice-sounding names on them, and then you actually read the bill and it will be 4000 pages that have nothing to do with the thing that forms the title of the bill; and nobody--literally nobody--has ever read the whole thing. Even the people who wrote it. There's 435 members of Congress; each threw in a few pages. So even the authors of the bill don't know what's in the bill. They just know: well, I've got something I can take back to my primary donors and my constituents. I can say: see, I've done what will warrant you in re-electing me, or in putting me on your Board of Directors so I can get $100 million payoff after I retire from the Congress or the Senate. So, you've got that kind of dynamic going. And so even good purposes give rise to corruption, well-meaning purposes give rise to an increasing level of corruption; and as a country gets older, as its bureaucracy gets bigger, I'm sorry, but it escalates. It starts growing, if not exactly exponentially, but at least episodically there will be periods of exponential growth, growth and emergence of new forms of power that wouldn't have been imaginable a generation ago will be accepted as just the next little step--if we didn't object to the previous step it doesn't make sense to pick this as the place. Russ: Boiling the frog. Guest: I guess that's the metaphor. That is my main concern as well, just that power is not going to be used for the purpose for which it was ostensibly created. It's going to be used for the purposes that the person holding that power currently has. Russ: I think back to a podcast a few years back with Bruce Bueno de Mesquita where he talked about King Leopold of Belgium, who was pretty popular among the Belgian people at the time for some of his social policies and legislation, where he was constrained by a Parliament. In the Congo, he was unrestrained; and he murdered millions of people--I think millions, certainly hundreds of thousands--and took booty and plunder. And I think Bruce very eloquently asked the question: Which was the real King Leopold? And we know the answer: the one who was unconstrained. Not a pretty picture. So, I think it's a real issue. What it brings to mind, though, which fascinates me--I haven't thought about it enough--is that interaction between the political system and the economic system. And Rawls kind of abstracts from it. Nozick--cynical is not the right word--he's not romantic about democracy. He has that extraordinary passage of the parable of the slave, which I recommend to everybody. I don't know if I can legally put a link up to it, but I'll try to; and you can certainly google tale of the slave Nozick. The foundation for libertarian ideas and policies.