I.

Are things getting better?

The Cato Institute’s HumanProgress.org promotes the wonders of the modern world as a general cheerleader of liberal capitalist democracy. It highlights that the Human Development Index is up around the world over the last 30 years, and worker earnings can purchase higher quality and cheaper goods than they could 40 years ago. However, not everything is peachy. Inequality is up, US labor force participation is down, and healthcare and education spending have increased faster than inflation for some time now. Technological breakthroughs seem to be about how best to spy on you to sell you targeted advertising instead of flying cars. I favor the idea that things have indeed gotten better, but perhaps it’s not as straightforward as I would like.

Let’s revisit an idea I wrote about two years ago.

John Rawls proposed the Veil of Ignorance as a thought experiment to help imagine a just society derived from first principles. Designing a world, people should imagine themselves having no knowledge of their natural abilities or social standing. In order for society to be just, it must be one that everyone would agree to behind this veil of ignorance (this is a big simplification, you can read more here).

Robert Nozick famously responded to Rawls’ A Theory of Justice, with Anarchy, State, and Utopia, and part of his critique of Rawls was that even a society that fit Rawls’ criteria of “just” would quickly become less equal since people do have unequal natural talents. Voluntary transactions between citizens would quickly reward those with natural abilities for in-demand skills, and thus society would quickly fail to meet Rawls’ “just” criteria despite starting from a state of justice and undergoing nothing but voluntary transactions.

Of course, I’m more interested in policy than political philosophy today. I should be clear that Rawls wrote this as a philosophy thought experiment, not a political goal, but that hasn’t stopped it from being used to encourage certain policy outcomes; economist Dan Ariely polled people, asking them to create a wealth distribution for a society they would willingly enter in a random place, and they overwhelmingly chose extremely equal societies.

There are a few fronts I’d like to push back on this. The first is that those polled severely underestimated the current level of inequality. This means they imagine society should be more equal than what they think it is, meaning they believe society is flawed today and perhaps could be fixed. Yet the problem is much “worse” than they imagine, and they didn’t seem aware today. Perhaps people overestimate the impact of wealth inequality on their lives. In fact there is some debate among economists on the extent to which inequality impacts economic growth (although most agree severely lopsided wealth disparities in developing nations indicate poor economic institutions and thus poor growth). Secondly, average people don’t have a great understanding of economic principles; a recent survey found only 57% of Americans thought free trade was good for the country, and this was one of the highest percentages ever recorded. This is despite the fact that economists overwhelmingly believe free trade benefits all societies. Thus, even if people did know the extent to which this was a problem, it’s unlikely they could provide a great argument balancing trade offs inherent in economic policy calculations.

The final, and most important point is that it would take significant policy interventions, economic and otherwise, to change the layout of society to match that which Rawls’ derives from first principles, and certainly which people surveyed want. These interventions could not be undertaken without massively changing the incentives for people in society. If high earnings are taxed at a massive rate, people may be significantly less interested in being productive, or they may choose to start businesses in other countries where productivity is not as punished by the tax system. Additionally, public choice theory tells us that government having control over a larger budget will become the target of rent-seeking and special interests who will prevent the more philosophical policy goals of redistribution from being carried out. American policy today is somewhat re-distributive. Transfer payments make up a vast amount of the federal budget, yet with annual budget deficits hovering around $1 trillion, there doesn’t seem much political will to increase taxes.

Given the political and economic realities we face, it’s worth investigating what options really appear in front of us. As I wrote two years ago, we can hijack an aspect of the veil of ignorance to actually promote an unequal society. Placing yourself behind the veil of ignorance, would you rather be in the more equal society of 1968 America or the more unequal society of 2018 America? In 2018 you have more expensive healthcare, it’s true, but you also have significantly more treatments available to you. You have more food choices generally, and certainly more healthy food choices for cheap. You have incredible communications and entertainment improvements for extraordinarily cheap. A gallon of gasoline costs almost the same in inflation adjusted dollars from 1975, yet it gets you several times as many miles in cars that are safer, more comfortable, and more reliable.

II.

So it does seem intuitively that things are better despite today’s society being arguable less fulfilling of Rawlsian justice. If society is improving in ways that Rawls’ political philosophy can’t capture, we should be careful about referring back to it as justification for policy. Nonetheless, Rawls did ultimately endorse specific economic institutions, and did so 30 years after his original publication in his revised book, Justice as Fairness: A Restatement.

Rawls rejected utilitarian approaches to political philosophy, believing that his system would be rationally selected over utilitarian ideas, yet even if rational actors would choose a Rawlsian setup of society, we have no way to get from here to there in the real world. Government is subject to political pressures and it cannot carry out idealized philosophical implementations. Thus, it’s true that we could propose policies that might create a better society, perhaps even one that better approximates a “liberal political conception of justice” as Rawls states it. Yet those policies have to be grounded in the political reality of our world, and there may be tradeoffs.

Modern political philosophy, and Rawls in particular, seems to be ungrounded from real world political policies. Chris Freiman, author of Unequivocal Justice, agrees. Rawls’ chosen economic systems have never worked. Does democratic socialism exist? If it does, is Venezuela the height of liberalism? If it doesn’t, then maybe we should stick with working on welfare state capitalism, while political philosophy goes back to the drawing board with the knowledge that governments are subject to biases and interest group politics. Rawls’ other endorsement, “property owning democracies”, is an economic system that I had never heard of before, but again doesn’t seem to exist, and I’m not sure it has even been tried. Freiman goes further, pointing out that if a perfect state could exist, we wouldn’t need the state at all, as people would just voluntarily give their extra wealth to create the perfect society. The assumption that is the basis for needing a state to redistribute is the same assumption that shows why states cannot redistribute wealth perfectly.

I enjoy speculating about fundamental changes in society. But there’s something deeply fatalistic about creating an entire political philosophy, defining liberalism and the ultimate way to craft the good society, and then declaring that the only method of realizing it is through political and economic systems that have been abject failures, or, in the best arguable case, have never existed. This is not an argument for libertarian economic policy or a libertarian society. That would tend to run into the exact same problem. Instead, this is a fundamental argument for a consequentialist philosophy. At the very least, idealized utopian fantasizing cannot be used to justify real world policy goals unless it’s built upon real world assumptions. Consequentialism is an excellent way to ground philosophy in the real world. This is also an argument for humility. There are very few economists who suggest state control of the economy would work without issues. It feels obvious that Rawls would have known this, so perhaps this is simply the best you can do with a current political philosophy knowledge, and perhaps technology will make these types of societies easier to achieve in the future.

Again though, this concedes that Rawls’ philosophy is only useful if it is completely separated from the real world. At the nicest, that seems risky to spend all your efforts on a philosophy that rests on fundamental assumptions of idealized government that is widely known to be false. Consequentialism focuses our work and discussion on the real world and demands empirical data to support policies.

Finally, don’t take this essay as a end-all critique of Rawlsian Contractarian Liberalism; instead, take it as a first step approach to why consequentialist utilitarianism is a helpful philosophy in policy discussion.