Are Rawls and Hayek compatible?

No way. That would be the answer to such question at first glance –and as you will see, that will be my final answer too. Nevertheless, Jinzhou Ye, a kind reader of my blog, has written to me and rightly pointed out that Hayek seems to have thought that his ideas weren’t so radically different from Rawls’s.

In the preface to the second volume of Law, Legislation and Liberty Hayek wrote that his differences with Rawls

 “seemed more verbal than substantial. Though the first impression of readers may be different, Rawls’s statement which I quote later in this volume (p. 100) seems to me to show that we agree on what is to me the essential point. Indeed, as I indicate in a note to that passage, it appears to me that Rawls has been widely misunderstood on this central issue”

Then in p. 100 Hayek writes that the problem of justice is relevant not only as the basis of the rules that judges apply but also for the “deliberate design of political institutions, the problem to which Professor John Rawls has recently devoted an important book. The fact which I regret and regard as confusing is merely that in this connection he employs the term ‘social justice’. But I have no basic quarrel with an author who, before he proceeds to that problem, acknowledges that the task of selecting specific systems or distributions of desired things as just must be ‘ abandoned as mistaken in principle, and it is, in any case, not capable of a definite answer. Rather, the principles of justice define the crucial constraints which institutions and joint activities must satisfy if persons engaging in them are to have no complaints against them. If these constraints are satisfied, the resulting distribution, whatever it is, may be accepted as just (or at least not unjust)’. This is more or less what I have been trying to argue in this chapter.”[1]

Though I admire him greatly, I think that here Hayek deluded himself. He wanted to hear a faint echo of his own ideas in Rawls’ book, and he overlooked the crucial differences.

An apparent agreement

Hayek wrote that the notion of social justice was a mirage, and a dangerous one. A few paragraphs before that quoted above, he wrote that it tends to destroy genuine moral feelings. It comes “into constant conflict with some of the basic principles on which any community of free men must rest”. Hayek defended the classic system in which rules have no other purpose than to allow each one to follow his own road without colliding with others. Such rules are –Hayek said– like road signs that tell people how to reach their own destination but without commanding any collective destiny. I have described that system in more detail in a previous article.

Of course, laws that comply with that requirement don’t establish who owns what. Distribution comes from the play of the market, that is, from the judicious, injudicious, lucky, or unlucky decisions of millions of people. The price mechanism makes it possible for them to collaborate without a general agreement about collective purposes. The men who make bolts do not have to agree –or have any idea– about the usefulness of the simple door, or of the complex machine in which bolts might be used. They agree with the maker of the door and the machine about the price. Nothing more is needed, and to require agreements about further and general goals is not only inefficient, but immoral. A system requiring more agreement than is possible, moral, and efficient can only attempt to work under the command of a bigger, more powerful, and ultimately uncontrollable government.

Rawls’s system might look similar at first glance. So it is when one reads the paragraph quoted by Hayek. Rawls too relies on general principles and says that whatever distribution of goods that results from a system that complies with those principles must be considered just. The difference, the enormous difference, is that Rawls’s system includes equalization by redistribution as a fundamental “principle”. In other words, Rawls made a goal into a principle. After that, one might think that his system relies only on general rules, not on collective goals. Wrong: what happens is that a collective goal about the distribution of goods has been adopted as if it were a rule like any other. But it is one of Hayek’s fundamental insights that rules and goals are different. And if one uses the name of “rule” for collective goals, that difference does not disappear. It is blurred only.

Oceans of discretion

One must remember that Rawls does not include property among the fundamental rights protected by the first principle of his community. Property is regulated by the difference principle which states that differences in wealth are allowed only if they improve the situation of the least fortunate members of the community (least favoured by nature, luck, or anything else). For instance, medical researchers might be allowed  (mind the passive voice) to buy and own expensive equipment, and perhaps be permitted to retain a considerable part of the profits that comes from their discoveries, if it is considered that such level of inequality works for the benefit of the least fortunate. The passive voice should alert us that some government official or authority is implied. The passive voice allows one to overlook the agent that performs the action, therefore its frequent use in bad political philosophy.

The difference principle is made both more stringent and more uncertain by two further requirements. First, the improvement of the least fortunate must be the maximum possible. That means that it is not enough to say of an inequality of distribution that it improves the situation of the least fortunate in some degree, if another distribution would make it even better.[2] Secondly, Rawls tells us that what must be improved are the “expectations” of the least fortunate, which some personal traits may make different from actual improvement of their wealth or situation. Government must care about classes or categories, not about individuals.

Now the two systems –Hayek’s and Rawls’s– look absolutely different –as indeed they really are. We must also be aware that Rawls’s system requires momentous decisions “on the merits”, a kind of decision that proper rules (in Hayek’s sense) must not put in the hands of governments. For instance, on what basis do authorities select the least favoured group? There are none, as Rawls openly admits “it seems impossible to avoid a certain arbitrariness in actually identifying the least favoured group”[3]. As to the reasons that would justify the taxes that will be used to nip off the inequalities that are not justified (in the view of the rulers) Rawls tells us with commendable frankness that “naturally, where this limit lies is a mater of political judgement guided by theory, good sense, and plain hunch, at least within a wide range”.[4] As another tool for equalization Rawls mentions “redefinition of property rights”.

Same conclusions reached from different paths?

Rawls said that his system was compatible both with socialism and with free markets –free markets with a considerable degree of intervention. In contrast, one would say that Hayek’s ideas aren’t compatible with socialism, and that they run against strong intervention.

Moreover, while Rawls rejected that property were to be considered a fundamental right, one would say that Hayek adhered to Edmund Burke’s definition: we all have equal rights, but not to the same things. And among such rights Burke (and Hayek) surely included property. Rights can be equal only if they are unrelated to the condition of the person or the amount of wealth. Rawls’s system pursues a redistribution of property: that is why property cannot be a fundamental right in it.

All that said about the differences, there is an element in Rawls’s system that makes its implications very vague (even more vague than they already are without it). And because of the haziness that this element adds, because of the fog that it suspends on the oceans of vagueness already opened by Rawls, one might say that his system could well provide a justification for capitalism. The trouble is that it could well justify almost anything else. Let’s see how Rawls introduces this new element.

Rawls tells us that there must be justice between generations too. Some amount of saving, for instance, is necessary for the well being of people not yet born. This new element must also be balanced (again mind the passive voice). Rawls uses it to show that perhaps considerable differences of wealth might be admitted as fair.[5] For, while they might not seem justified according to Rawlsian principles when applied to people living today, it might be argued that such inequalities are necessary for the well being of people in some future generation.

Rawls says that his difference principle cannot be applied between generations because economic benefits go only in one direction, that is, to the future.[6] Just for the record I would say that debts for loans taken today are often passed to future generations, and that will affect distribution in the future. But, leaving that aside, now Rawls has a new element that may justify the wide differences of wealth that are to be found in any place where the means of production are possessed by individuals or private companies. In this way, one could say that Rawls’s notion of justice may be presented as a justification for capitalism and free markets.

Nevertheless, it would be difficult to find a shakier basis. With its exclusion of property as a fundamental right, with equalization as a goal-principle, with its need of a myriad of momentous collective decisions for which it recommends a good “hunch”, it is the worst defence of freedom one may devise.

Hayek described and defended clear principles that build a stronghold for liberty. It is solid because it is rooted in history. In The Road to Serfdom he dealt with, among others, the British and German experiences. Rawls built a castle in the air with no reference to history. Anyone who plans to use that castle for the defence of liberty must be aware that it offers all its gates open for an easy access of attackers. Its basis could be used for as well as against freedom and personal independence. The question about the needs of future generations as against those of the present one will be argued, the selection of the least fortunate group and the proper transfer of wealth will give rise to many different hunches. The redefinition of property rights will provide room for ingenious but controversial schemes. But don’t you worry, in the end, some authority will settle everything down.

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[1] Law, legislation and liberty, The University of Chicago Press.

[2] “In other words, however much a scheme improves the expectations of the less fortunate relative to full equality, it cannot be just if a more egalitarian scheme could sustainably do better for the less fortunate” Philippe van Parijs: Difference Principles, in The Cambridge Companion to Rawls. Cambridge University Press 2002.

[3] A Theory of Justice. Belknap Harvard University Press, Revised Edition p. 84

[4] A Theory of Justice p. 246.

[5] A Theory of Justice p. 252.

[6] A Theory of Justice p. 254.