Friday, September 04, 2009

Phelps on Rawls

I think I read Rawls wrong as an undergrad. Phelps sets the record straight:
For sure I always had an interest in justice and fairness, even as a high school student and certainly in college. But Rawls (1971) was almost the only piece of work that was a systematic examination of what we might mean by economic justice. It was this that got me going. Until then I was interested in the subject but my interest had been confined to providing people with social entitlements to provide for basic needs if they couldn’t provide for them themselves. (By the way, I was one of a small group of economists advising Robert Kennedy in 1968 prior to his expected campaign for the presidency; of course, he was shot before he got the nomination.) What was fascinating about Rawls was that he wasn’t talking about some sort of broader justice on, say, the division of land or schooling. He was talking about dividing the social surplus that comes about when people cooperate in production. Although he didn’t use the term “economic justice,” this was really what it was all about. I thought that his work was such a breath of fresh air—we don’t have to be talking about everything at once any more, we can talk about this for a while and get it straight, and then we can think about entitlements for people who don’t work and who are not part of the economy.
Then a funny thing happened. When I was writing my textbook Political Economy (Phelps, 1985), I knew I had this chapter coming up on economic justice in connection with taxation and whatnot. At the same time, I knew that professors in law schools had Rawls standing for something quite different—for some unspecified version of social justice and extreme egalitarianism. So I wrote Rawls a long letter from Amsterdam in 1981 or ’82, where I was one summer, asking him to confirm that my interpretation of him was right: that he’s not talking about the distribution of wealth, he’s essentially talking about the principles for a just pattern of wages to apportion the surplus that gets created when people of diverse talents and backgrounds cooperate with one another. He didn’t answer the letter. Finally I finished my textbook and sent him a copy, whereupon he wrote back a lovely comment saying that I had accurately represented his position.
But people continued to misrepresent him, and in 1991 we had lunch in New York together, and I was complaining to him about this and his apparent reluctance to say anything in print to disavow any of these other guys with their rival interpretations. There was one guy—a philosopher of sorts—who interviewed him in a book–length way towards the end of his career, and he asked Rawls this question: what’s this economic justice about, who’s it for, what sort of conditions do you have to meet to get this payment or whatever it is? And Rawls just comes out and says in a perfectly blunt way: “Look, it’s not for beach bums” [laughter]. And I felt so relieved and gratified that my little campaign to set people right on Rawls had been vindicated. But twice I had to come to his rescue in the Wall Street Journal (Phelps, 2002, 2007). Twice they smeared 120 Journal of Economic Perspectives him with the most naive thinking—as a rank egalitarian. I replied once in what I thought was a very eloquent letter setting them straight, but then they did it again about three years ago, calling him a socialist, and I again had to pick up my pen.
Then a few months later, I got an email from Rawls’s eldest son who wrote how disturbed he was about how his father had been portrayed. So I wrote back (and here I was sticking my neck out a little bit) that I knew him, that I’d been around at Stanford when he was writing his book, and that I thought he was motivated by the huge social problems in the U.S. associated with the difficulties young blacks were having connecting with the American economy. And I said I thought that Rawls was doing a tremendous service to an American capitalism jeopardized by the social problems that were becoming so inflamed at that time. His son wrote back that I was right on the mark.

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