RECONCILING LIBERTY AND EQUALITY: JUSTICE AS FAIRNESS 1. Two Arguments for EqualityLibertarians make two kinds of criticisms of policies that aim to address economic inequalities. Instrumental criticisms claim that such policies have bad effects. For example, those programs are sometimes criticized for generating inefficiency by distorting market prices and limiting incentives to work and invest; sometimes for requiring a large regulatory apparatus that will be captured by organized interests seeking to use that apparatus to advance their own narrow interests; sometimes for requiring a concentration of political power that threatens liberties of conscience, thought, and political participation. A second, distinctively libertarian philosophical criticism is that the programs are unjust because they violate an individual right to liberty. I mention this distinction now because we can, correspondingly, distinguish arguments in favor of polices that aim to correct for socio-economic inequalities into two distinct types. Instrumental defenses deny that the policies have the grave disadvantages alleged by critics: the negative incentive effects, for example, are said to be relatively small, because supply of labor and other resources in not that responsive to expected rewards. More positively, the egalitarian might argue that reducing inequality is good for the general welfare and/or that extreme inequality is bad for democracy. Consider the general welfare argument. One version starts from the premise of diminishing returns to investments in a person’s education andJustice, Fall 2003—2 training: so the productivity gains that come from greater investments in people with higher levels of human capital are smaller than the gains from the same investment in people at lower levels. So society would do well to invest more in the education and training of members of society who have relative small amounts of education and training (and assuming imperfections in capital markets that make it hard for individuals to finance their own education and training). Those investments will bring greater market income for those individuals, thus reducing income dispersion. But they will also bring greater gains for society: according to the general welfare argument, they will promote both general-welfare-enhancing growth and equality (of opportunity and of outcome).1 The egalitarian might also argue that great inequality is bad for democracy. One version of the argument says that when people are very unequal in resources and living conditions, they do not think of themselves as belonging to a single political community: as a result, the basic solidarities required for a well-functioning democracy are undermined, and the consequence is increased social conflict, unwillingness to make sacrifices, diminished civic participation, and great difficulties enlisting the energies of everyone in the face of common threat. Both instrumental lines of argument are important. Indeed they provide a case for worrying about inequality even if you are a choice-based libertarian who, like Friedman, thinks that it is permissible for government to act in ways 1 For discussion, see Philippe Aghion, Growth, Inequality, and Globalization, pp. 11-33.Justice, Fall 2003—3 that promote the general welfare: if it is permissible to for regulate choice for the general welfare, then it is permissible to do when such regulation has the effect of reducing inequality. Of course assessing both the general welfare argument and the democracy argument is a complex empirical matter. I mention them here, though, not to provide that assessment but to distinguish them from the philosophical egalitarianism that we will be exploring over the next few weeks. According to the philosophical egalitarian, certain kinds of inequalities may be indefensible not simply because they have bad effects on democracy or the general welfare, but because on more intrinsic grounds: because they are unjust. In particular, the liberal egalitarianisms proposed by Rawls and Dworkin say that the basic requirement of justice is that the members of society are to be treated as free and equal. In a society of equals—what Tocqueville called a “democratic society”—in which law and policy substantially effects the life chances of members of society, inequalities of opportunity and outcome create the suspicion that the members are not being treated as equals. As Dworkin says: “The distribution of resources that any society achieves is a function of its laws and policies—not just its property and tax laws, but the full, complex legal structure that its citizens and officials enact and enforce. If the laws were different in even minor respects, the distribution of wealth would in consequence be different. Under any structure of laws we can imagine, some citizens face bleaker prospects for their entire lives—or at least less glowing prospects—than other citizens, and a society of equals must be ready toJustice, Fall 2003—4 explain, to those whose prospects are worse, why it has not chosen a different arrangement under which their prospects would be better.”2 Such explanation may be available, and Rawls and Dworkin offer different versions of it. The point I wish to emphasize here is that the criticism on grounds of justice—on grounds that the inequalities in life circumstances in some way fail to show “fairness to individuals”—is a distinctive line of argument, and that the basis of the argument is the view that the members of a society are to be treated as free and equal persons. If Rawls and Dworkin are right, that very abstract principle has substantial implications for economic justice, and it may have larger implications as well: for political equality, and for how to think about gender and racial equality. 2. Two Principles of Justice John Rawls’s A Theory of Justice presents a theory called “justice as fairness.” That theory comprises two principles of justice, which are to guide citizens’ judgments about their constitution, laws, and basic social policies. � The first principle—the principle of equal basic liberties—says that each citizen has an equal right to the most extensive system of equal basic personal and political liberties compatible with a similar system of liberties for others. Whereas the choice-based libertarian endorses a basic right to liberty as such, Rawls’ principle of liberty requires stringent