Markets, desert, and reciprocity

Abstract

This article traces John Rawls’s debt to Frank Knight’s critique of the ‘just deserts’ rationale for laissez-faire in order to defend justice as fairness against some prominent contemporary criticisms, but also to argue that desert can find a place within a Rawlsian theory of justice when desert is grounded in reciprocity. The first lesson Rawls took from Knight was that inheritance of talent and wealth are on a moral par. Knight highlighted the inconsistency of objecting to the inheritance of wealth while taking for granted the legitimacy of unequal reward based on differential productive capacity. Rawls agreed that there was an inconsistency, but claimed that it should be resolved by rejecting both kinds of inequality, except to the extent they benefitted the worst off. The second lesson Rawls learned from Knight was that the size of one’s marginal product depends on supply and demand, which depend on institutional decisions that cannot themselves be made on the basis of the principle of rewarding marginal productivity. The article claims that this argument about background justice overstates its conclusion, because the dependence of contribution on institutional setup is not total. Proposals for an unconditional basic income may therefore have a strike against them, as far as a reciprocity-based conception of desert is concerned. If we follow Knight’s analysis of the competitive system, however, so too does the alternative of leaving determination of income up to the market.

Buyer Beware: A Critique of Leading Virtue Ethics Defenses of Markets

“…As Sugden puts it, “[if individuals are to] acknowledge every other as a potential partner in the pursuit of mutual advantage [then] they must set aside any resentments about existing inequalities [and] look ahead to the benefits they can expect to gain from cooperation” (, 366; also Buchanan and Tullock ). In the recent literature, various authors emphasize that in efficient markets individuals' rewards cannot be feasibly aligned with their respective deserts (e.g., Lister ). This, however, by no means implies that any mismatch between individuals' rewards and deserts is to be passively accepted by market participants.…”

Hayek’s Appreciative Theory and Social Justice

“…Williams (1997) argues that Hayek never successfully separates his account of the rule of law from his undefended but controversial theory of economic rights. Lister (2013Lister ( , 2017 draws attention to Hayek's and Rawls's (1971) common inspiration in Knight (1921) about the ineliminable uncertainty of economic life. Both, as a result, avoided making distributive claims with regards to desert.…”

“…What really makes the difference is the approach to economic inquiry. Pace Knight's early influence (Lister, 2017), Rawls endorses a static formal approach to economic modelling that characterizes the neoclassical approaches of Meade (2012) and Samuelson (1947). This account explains the success of market economies in terms of a general equilibrium under conditions of perfect competition.…”

Reconsidering the reciprocity objection to unconditional basic income

“…First, the question is about conditional versus unconditional income support, not income support versus no income support. In a competitive economic system, there is a reciprocity objection to the absence of income support (Lister, 2017: 62–63). Second, for reasons the article will explain, the reciprocity objection to unconditionality only applies in a society that is otherwise not too unjust.…”