Thu, Apr 7 2011 9:59 AM
Rawls and the Super-rich
A number of years ago a relative with progressive leanings presented me with a Christmas present in the form of John Rawls' “A Theory of Justice.” She told me that this the book sketched out the philosophical justification for redistributionist social policies, as she learned it from her classes towards her degree in social work. I read it. Ultimately, in the distribution of material goods, a just society was measured by the condition of its least well-off members. This criterion contrasts with redistributionist theories like communism, since it allows that inequalities may be just if they are necessary to give a greater benefit of the least advantaged. It is about height of the bottom than the height of the top or the gap between. Whatever you may think of the theory, it is studied by progressive policy makers. Hilary Clinton is a fan of his. When you hear the term “Social Justice” in America, it refers to Rawls.
Occasionally It has been observed that the wealthy 1% are getting wealthier as observed by this article.
In particular, the author notes that
With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. [Italics mine]
But what if pushing more wealth to the top is the most beneficial means of achieving the greatest benefit for the poor, not because of “trickling down”, but because of more efficient administration? In fact, we might have a real-world example
in the very food stamps program mentioned above,
where financial services giant JPMorgan is reportedly providing the debit card infrastructure services for food stamp programs in 26 states, and is the largest food stamp processor nationwide. It apparently replaced the previous in-state systems with a less expensive and more convenient process (e.g. they have a nationwide infrastructure for magnetic cards). Of course, this could be an example of the usual corporate government cronyism, but for the sake of argument, let’s give them the benefit of the doubt: the arrangement serves the poor better.
Are the salaries of such people (presumably in the top 1%) just as long as they provide a better social safety net? According Rawls’ theory, yes. If a small number of JPM guys can serve the poor better than a large number of state administrators, then have at it. Maybe it is possible to refine the arrangement such that their compensation produces less inequality than it currently does, but I’d guess not by that much. So this example brings up an interesting case where social justice might very well encourage some of that very wealthy 1%. The exercise of state power through a small number of highly compensated financiers is no more nor less just or efficient than through an army of mediumly compensated bureaucrats, more commonly envisioned.
The idea that it may be socially just to concentrate power in the hands of a few elites has been noticed by other progressives. Ralph Nader’s new book “Only the Super-rich Can Save Us!” fictionally explores the possibility that a financially well-endowed elite with a sense of noblesse oblige might be the most efficient means of improving the world. Might JPM not be an shade of Nader’s Super-rich fantasy? There is no hypocrisy in getting rich while raising up the poor. Walmart does this every day. Additionally, at least according to Rawls, there is nothing wrong with becoming rich by raising up the poor on the dime of the tax-payers. Of course, the taxes must be born by someone, and it will not be the poor people being helped or the super-rich people administering the help. One could build a pretty nice empire helping others through the government, I think.
And thus we find ourselves on the Road to Serfdom.