Abstract:In this paper, we present a socioeconomic model illustrating the difference principle first proposed by John Rawls (1971). We demonstrate that this principle can be fulfilled by incorporating reciprocity into the basic structure of society. We show its appropriate embodiment in external increasing returns in line with traditional neoclassical economic theory, which is the exact mechanism described by Rawls (1971, 2001). Our model yields an intuition and interpretation of the principle by showing its implementa… Show more
“…It is no longer a matter of shuffling about a fixed stock of goods ( [1], p.77)." Suzuki [7] constructed a socio-market model based on the production function (1), which satisfies the difference principle described by Rawls. As it is endowed with an economic market as its basic institution, our model represents a property-owning democracy or liberal (democratic) socialism.…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…The latter yields the point where the curve and 45-degree line intersect in Figure 2. Hence, strictly speaking, the contribution curve is then the region north-east of the curve obtained from (7). Rawls also stated "the difference principle is a strongly egalitarian condition in the sense that unless there is a distribution that makes both persons better off (limiting ourselves to the two-person case for simplicity), an equal distribution is to be preferred.…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…Theorem 3: For all κ ≥0, x 1 +x 2 is maximized for (7) at ; see [7], for details. The utilitarian principle insists that the state where the advantaged persons monopolize all is just!…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…is the only Pareto optimal allocation on the contribution curve from (7). If we only consider optimality or efficiency in the market results, then the maximal economic difference is a desirable state for society!…”
“…It is no longer a matter of shuffling about a fixed stock of goods ( [1], p.77)." Suzuki [7] constructed a socio-market model based on the production function (1), which satisfies the difference principle described by Rawls. As it is endowed with an economic market as its basic institution, our model represents a property-owning democracy or liberal (democratic) socialism.…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…The latter yields the point where the curve and 45-degree line intersect in Figure 2. Hence, strictly speaking, the contribution curve is then the region north-east of the curve obtained from (7). Rawls also stated "the difference principle is a strongly egalitarian condition in the sense that unless there is a distribution that makes both persons better off (limiting ourselves to the two-person case for simplicity), an equal distribution is to be preferred.…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…Theorem 3: For all κ ≥0, x 1 +x 2 is maximized for (7) at ; see [7], for details. The utilitarian principle insists that the state where the advantaged persons monopolize all is just!…”
Section: Toy Model For the Difference Principlementioning
confidence: 99%
“…is the only Pareto optimal allocation on the contribution curve from (7). If we only consider optimality or efficiency in the market results, then the maximal economic difference is a desirable state for society!…”
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