Economics with(out) ethics? An interdisciplinary encounter between public economists and John Rawls in the 1970s

Abstract

This article analyses selected interdisciplinary exchanges between analytical political philosophy and public economics in the United States during the 1970s. It focuses on three core themes in which public economists interpreted, discussed, and incorporated concepts from John Rawls’s A Theory of Justice (1971), namely: (1) the limits and uses of utilitarianism as a useful framework for capturing social welfare; (2) the ethics of promoting justice and fairness; and (3) how to promote redistribution through taxation. An exploration of published and unpublished sources (personal correspondence, articles, and books) following the publication of Rawls’s magnum opus reveals an intense engagement from public economists with key Rawlsian concepts in the 1970s, in particular the “maximin.” Whilst such exchange offered important thematic inspiration for making the field more ethically driven and engaged with justice-related issues, generating policy discussions on promoting redistribution through optimal taxation, their exchange remained within the economist’s formal toolbox and way of reasoning. Political philosophy made public economics to become ethical without challenging the core epistemic-methodological foundations of economic reasoning.

Keywords:

• Public economics
• analytical political philosophy
• John Rawls
• interdisciplinarity
• utilitarianism
• ethics
• redistribution

JEL CODES:

• A12
• B29
• H00

Acknowledgments

We thank Maxime Desmarais-Tremblay, Marianne Johnson, and Richard Sturn for their useful comments on earlier versions of this article, as well as the participants and organisers of the “From Public Finance to Public Economics” Workshop at the Graz-Schumpeter Centre (University of Graz, Austria) in September 2022, as well as the comments from two anonymous referees. We also thank the Harvard University Archives for kindly providing us with the Rawls Archives, as well as Alicja Kobayashi for assistance with archival research. The usual disclaimers apply.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 For this, we build on some of the principles proposed by Michel Foucault’s (1926–1984) and his contributions to historiography of economics and political economy (see inter alia Lima 2010; Guizzo 2021). By offering a form of “philosophical history” (O’Farrell 1989), archaeology helps to investigate what made possible for a certain scientific discourse (discourse-as-knowledge) to be made possible and acceptable as truthful in a given time, within a specific cultural-social context, and which relations were necessary and sufficient conditions for this to happen (Lima 2010). One example of this is by looking into the histories of a field as practices (Maas, Mata and Davis 2011) and how they led to a change of discourse.

2 Quoting Atkinson and Stiglitz (1980, 3).

3 See 12^th part, chapter 2 of A Theory of Justice (1971) where Rawls relies on the economic modelling of efficiency to go on and argue for the necessity of a principle of justice.

4 Rawls (1971, 30–31) claims that in the utilitarian formulation, we have the unplausible requirement that “if men take a certain pleasure in discriminating against one another, in subjecting others to a lesser liberty as a means of enhancing their self-respect, then the satisfaction of these desires must be weighed in our deliberations according to their intensity, or whatever, along with other desires”.

5 For a detailed context on this interaction, see Igersheim (2023, 7–8).

6 Feldstein cites a previous unpublished version of a 1973 manuscript entitled “Maxi-min and optimal income taxation”.

7 On this, Solow (1974, 30) says: “I am going to be plus Rawlsien que le Rawls: I shall explore the consequences of a straightforward application of the max-min principle to the intergenerational problem of optimal capital accumulation. It will turn out to have both advantages and disadvantages as an ethical principle in this context. The disadvantages are primally those that led Rawls to shy away from it, though I shall be able to characterize them in more detail.”

8 Forrester (2019, xv).

9 In a letter to Buchanan replying to an invite to speak at the American Economic Association Meeting in 1973, Rawls reveals his puzzling sentiment on redistribution, and asks why economists are calling his session at the AEA as “redistribution” (rather than simply distribution): “You suggest in your title that the subject might be “redistribution theory”. Is this different from distribution theory in general; or is it a subpart of the latter, as it might seem? There is no need to clarify this unless I’m wrong in thinking that the two are pretty much the same and that I can discuss distribution in general, assuming some reference is make to redistribution as part of the whole picture.” (Rawls to Buchanan, February 6th, 1973b)

10 Later published in the American Economic Review (vol. 67, issue 1, 1977).