A few months back, I received a call for essays from the AEI Initiative on Faith in Public Life. The question was: In the contemporary United States, what would a truly humane economy look like? and it has been rattling around my head for a couple months. Occasionally I’ll write down some thoughts. In this post, I want to share with readers an excerpt from those thoughts.
“… I will situate a humane economy in the literature on fairness and justice and turn to a well-known philosophical device called the “veil of ignorance”. From behind this veil, there is no knowledge of race, sex, abilities, etc. From behind this veil — unencumbered by bias — a person would choose a humane society. John Rawls believed individuals, not knowing where they would be located in the income distribution, would seek to maximize the lowest income. This is what he called the “difference principle”.
In 1987, three political scientists conducted an experimental test of the veil of ignorance (Frolich et al., 1987). Students were presented with distributions of income that reflected different philosophical convictions like utilitarianism, egalitarianism, the difference principle, and utilitarianism with a floor constraint. Then students were asked to vote on their preferred distribution without knowing their ultimate position in the distribution. Students then deliberated with each other for a minimum of five minutes and unanimous vote was required for the adoption of a distribution otherwise one would be chosen randomly.
Rawls was right that individuals come to unanimous agreement behind the veil, however, the difference principle failed. The authors write, “Under all experimental conditions, all groups reached consensus and no group ever selected maximizing the floor as their preferred principle.” From behind a veil of ignorance, what did most people want? Overwhelmingly groups chose utilitarianism subject to a floor constraint. For a majority of people, prosperity is not dirty and undesirable. The economic pie can be large and some people can do very well. However, there is some willingness to limit the ceiling to raise the floor.
The direction of Rawls’ instincts were correct. People do think about the folks on the bottom rung and this experiment, and others like it, reveal something about human nature. We want the opportunity for great prosperity and we want to care for those less fortunate …”
After this discussion of the veil of ignorance, the essay proceeds with a reminder that if we are attempting to secure some material threshold, the poor in the United States are materially doing well by historical and global standards. But, for the remainder of the essay I focus on a different kind of poverty: unmet needs. Specifically the needs for purpose, security, and opportunity. Then I make the argument that to best meet these needs we need a more robust civil society and federalism.
Economist Writing Every Day 