Universität Bielefeld/I MW. Working Papers. Institut für Mathematische. Arbeiten aus dem. Institut für Mathematische Wirtschaftsforschung

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1 .. Universität Bielefeld/I MW Working Papers Institute of Mathematical Arbeiten aus dem Institut für Mathematische No. 22 Economics Wirtschaftsforschung A Further Note On Rawls's Theory By John C. P~rsanyi University of Califürnia, BC1keley, and University of Bielefeld July = =-==-.._-- --,- -'--'.. ~~:~%:~;~j " ' H. G. Bergenthai Institut für Mathematische Wirtschaftsforschung an der Universität Bielefeld Adresse/ Address: Universitätsstraße 4800 Bielefeld 1 Bundesrepublik Deutschland Federal Republic of Germany

2 - --- A Further ~ote On Rawls's By John C. Harsanyi Theory This is a postscript to my review article "Can the Maximin Principle Serve as a Basis for Yorality? - A Critique of John Rawls's Theory" (Working Paper No. CP-351, Center for Research in Management ~8rkeley, California Science, University of California, Copies are available on request.) ~ince this paper was written in May, 1973, John R2wls has tried to c'1s\'lersome of my cri ticicisms in a p~per entitled "Svne Reasons for the!taximincriteric 1" (J..merican Economi~~-!.ew, Pc,pers & Proc., ~1ay 1974, pp. 1~1-146). His defense to the counterexamplesj have put forward against using the maxi""d n.[i i 'ci pi e,"'.sa moral In incirle (in Section 3 of the p e- eeding paper) is that "the maximin criterion is not meant to apply to s~allsc~le situations, say, to how a doetor should treat hi spat ic.'; s or a t::nivt rsi ty i ts students.... '1:axi min is a maero not a miero principle"(p. 142). Regretful1y, I ri\) st <ay thnt this is a singularly inept defense. Fjrst of all, though my counterexamples do refer to ~..~ll-', ~te sil~ati0ns, it is v ry c~sy to 2~2pt them to largesc'ale ~i t c tiens since they hc.~:eint r i Tl' {cally l10thing to do wi th ~Ce le,'hether s.'all or lc.. '_'ge.for I.Vi'!"ple,in stead of asking v~het"'it r a~' (~Ol' ';LUJld 8 a life" 2\riilg c"rug in short supply for t}.,t L:':].L:ti. it\ or r,tilt B, "e can o.skwhether, in allocating SCc lt.:e.~acc 1,"I'.'lu'.,;er end other resources, should society give priority to those patients who could best \-",,"'c it ffit Jcdical treatment, or should rather jl'e priority ",) 1',: t ~(~,,] 'sly ~ick pe,ticnts - - a policy ploblfffi sl1,llly ~j:tctig ( Cl Lntry of c r( e catiu.j I; t cl l'::;l.>,dt's"',:d indivi\.~pals in ;qy n:ajor cly g iv (~n in c p r t < 1:1, ~ f S t 0 :..;. " l.r? 1 tine. (Ir, i'!gain, i ~te d of ",)ring v,'hether l ~ 1., I r 1 <, \; 1 c' l.11 (.', (i ' s,..j(,1 t.y d E"nt s.. :'a ( ( i.' 1d. ' 1Y L~rJ":"'1d,,"L::{l:,lyiLt - ~ed dnor lc-lefits ftom ajditionc31, '" " i t~ L1l ~ or 1ty ~.i..d t'''ld ~~(J','j gifted stui i t i-,,;1: to;=j 1 h ~ d.;:, C'",, " ~.', ~ (, ( t i 1, t; t c.,-..i' -1,~('~l~e (. Y I?M rlally C~LO-

3 - 2 - over1ooked the simple fact that the counterexamples I have a~dl1ccd (and the many more counterexarnples one could easily adduce) have nothing whatever to do with scale at all. In fact, it would ~e a priori r~ther surprising if, at thc most fundamental level, the basic plinciples of morality should tare different :orms for 1arsc-scale and for small-scale situations. Does Rawls serious1y think t}~t there 1s a certain number x, such that a situation involving ~ore than x people will come under moral principles basically different from a situation involving lc3s than x people? In any ("a.se,what moral considerations will determine this curious r)u;;dary number x itself? T>1orefundamentally, what are the basic logical reasons that should make large-scale and s~nall-scale situations essentially different from a moral point of view? I C2n,:ot :"'-eehow arlyl.ody C2'1 plopose th~ st '1ge ('!OCtline tha t scale is a f'":1da:entalra~ ic ble in ),,(al phi ]:f( lhy, wiuout giving credible ans..:crs to these Cjuestions at the Sdi1e time. I heve ~_(;j"f>d th.it in!:p'ost fit.uc~tjonsr2wls's theory will have ruch the s.fle policy i!lplic-atio.s as ut i1 itarian theory does, but tr t there d:e s_~~ L1pOl.tC'1t c,itpatio!s ~I're this is not the case. ~()rt_(;.~~r,i 1ve tli.d to cl.y.'l J'hat, in those situat ions vihere two theorif's (~o ~. ve (...ui t.e cli ssiillilar policy implications, Rawls's theory consist.ently yields morally highly unac-_ ( "t ~ ( 1 1 ~ 1'01icy conclusions whereas utili tarian theory ("onsi st E:üt- 'y..l~ 1('s J ~L ]ly +ul1y q.cge.ntc\b!.ones (~E..:ctj(J'1S 3 cd 4 of t'1e prn ~ Hng i p.'r). 11 LO..1 '- ~ s " ~ II da; \ ; ] (' r v i ( 'fl r:.,.( 11r,'1 0 f ~h i 1 0 ~ 0 J ~'. V '- JV I.:I - 1 'J ' t i t }-<.: i 1 world the Ai '.: 1 1:-'.1. ; (i.l. 1 e d ~.~ e t j 1 i I' n t r. j i1c i 1..1~ ~ '" 11 d have very similar py~clira1 (c :.qu(j ces, he adds: "... t.he rnaxirin! linciple T.'ould le;.ad to 1.( «_. 'le t;,nselupnces if t~e T c>r'd.i. e ~. eh that t:-ty [thc' je c-on.~..ue1c('s] n..ally CliffE' d". '1 '1 ~i (y~c~ (nt ~ith llrow is that I think the world is in f~(t 0 CC'1 c:-t i t..:..t- ( d that t:-tcse two principles do have very difft..;u,1t ). c ( l (...l.,fa 4 '_ s i '1 ". e ; :1""1t s. (IT} J f '.;s r, <...,.,,.!, 1 f J.) t.. ( «j- I i 1 3,.,.J... 1 j t-,,

4 l pp ) But we do agree on the main point, viz. on the conditional statement that, if such differences.exist, then they all speak very strongly against the maximln principle. In my opinion, if this criticism is valid, then it completely disqualifies Rawls's theory as a serjous competitpr to utilit2rian theory. (Why should anybody choose a theory that often does much würse, and never does any better, than utilitarian theory does?) For this reason, I find it rather unfortunate that Rawls's paper does not even try to answer this criticism at all. To be sure, the maximin principle does have its valuable uses, and we ~ust be grateful to Rawls for calling our attention to it. E\en if it eannot ~rrve as a b?sic principle of j~ral the01y, -- - _.- it ean be used as a piineiple of ~~proxijnate vdlidity in practie~l ~plieationsl ~,ueh as the theory of optimal inevme distribution er of optimal tixation. In ~ueh arplications, its rplative independence of dctailed interppj"sonal utility eolt~?arions, and of the aetual mathematical furm of ~eople's von Neumann-Morgenstern utility functions for money, is an important advantage, and can be fr'uitfully exploited in economic studies [cf. Arrow, op. cit., p. 259]. Of course, from the point of view of a utilitarian observer, the l~ ~ults of a study of, e~g~, optimal ineome tax rates, } - ~('(on tre mc...ri'dnl'h'ineiple,,,;i1lhave only approxirtate valil'ily. For example, if the study finds that, owing to the dis{ ;entive effeet of very high ~arginal tax rates, the ~1Iginal ineome tax for the highest inc('"e giou) ~:.lld }-,e (~ay) 50 I r ee'1t, then a utilit?rianobf.lc}:td1{ fll1-" ti'1.slx t; t "d(lrtai'1lyl~.!iq.2!lore th.:'l'1:0 LA~r <,t.;1r. """'('(1, re ( n it,fer t'.;;t, if the!:t rj had been La ~(,d on the ä\lt"i Je ut i 1 i ty pi L eir1 e instead of the mayi;'1in I i ({ i le, t~ln t"e T ':, (J{ 21 tr:..xlate at the top \'0,1d pc.lr;:ps 0t Vt l.y r, ueh lower. (Sensitivity analysis may,-"en e, '",,1e us t0 c!"1..': ',ate the aetual p -ereentage poi nts by "hich stl'dü s

5 'ould based on the maximin principle are likely to overestimate the optimal tax rates for various incrnne groups.) It is regrettable that Rawls has ever made the untenable claim that he is proposing a moral theory superior to utilitcric:} theory. This claim can only obscure the practical merits of ~he maximin principle as an e?sily appjicable postulate of appro,imate validity. These practical merits of course do not in any way provide a reason for abandoning utilitarian moral philosophy. (Basic philosophical principles must be exactly right, and not merely approximately right.) But they do provide a reason, even for a utilitarian moral philosopher, to use the n~ximin princ~ple as an admissible approximation in many cases. Had Rawls only made this more modest, but much more realistic, claim for the maximin principle,few ppople '. have contradicted hirn. One thing that all of us must heve Iparned in the last fifty years is the fact that we must never cor~it ourselves seliously to I.,(}~lprinciplcs or political ido1<'gies that are bound to lead to morally utterly ~'~J~ policies fn)!1\ time to time - - however great the advcntages of these principles or ideologies may be in terms of administrative convenience, ease of application, and readier understandability.

6 Norking Pal~rs Nr. 1 Carl Christian von Weizsäcker: The Political Economy of Stability in Western Countries, - The Wicksell Lectures - Stockholm, 2nd and 4th May, 1972, published at Almquist and Wiksell, Stockholm Carl Christian von Weizsäcker: "(j lf~rn Capital Theory and the CCilceptof Fxploitation, July 1972, l'ublished in :~yklos, j'ay "'ir. Nr. Nr. 3 Carl rhri tian von PP:i2: 'kl.er: A ~~W T(chn'cal Progrt.ss Function (1962), August Carl Christi an von \'ieizs.'icker: Long Term Global Optimization in Educational Planning. A Sir1ple F>:0i'1I'.1e, Septen'ber Carl Christian von Weizsäcker: '"nt f>r e'1erationell e Einkomrnensvel. teil ung: Finfache )eispiele 7ür \'~irkui1lje'n steuerlic,er '1C!ßnah,..:n und {"ijr (He cl-"'" -'le St('h-r~trl1k.tL1r, C('io'er 1S72, I.Jbli..1-I'd in,'(,3 l'q)ti.te(~t>r "IJtE.il.j~tl, J'e, G.poTT1baC'h, 9. Fr.ey, B. ('.,;h"n (cds.), 'nibil~j::..n Carl Christian von Weizsäcker: ~~r. 7 Yenneth Arrow's ContriLution to Ecenomic ScienC'E's, r"ovl. bt r 1972, lubli~ lj.:d in S"erli~hJOllu''''l of i-'l (,,0- rnigs, Velo 74, r~rl ChI',,,t i <.1."1'1 <7'-'1..,.-, i '1 ; 1 '1,"',., \.. 11.')li d i,1..; c l.y 1}71, T("lIlal, T" 'i d' ; 1 'tr 1./1.. 71, 8 Reinhard Selten: A Si p'ple Horiel of Ir1perfect Competi tion, \Alhere 4 are 1', <'1 'Ld 6 bre "1eny, FC'bn'ery 1973, published in Inter- ',1 Je:, 'I cf (' e 'l"':~',l'y, D" ' '.:>r "j. 10 r. ~, vf Y 1~11. t' 1 J 'n, 1 r. 11 t,d,.1,',1 «'"'!h J.g: ;"y i",trr-t'd,~fjl1... l' 'r HCt:S, July 1973.

7 - 2 - Nr. 12 Nr. 13 Nr. 14 Nr. 15 Carl Christina von Weizsäcker: Grenzen der traditionellen Globalsteuerung, October 1973, published in Jahrbücher für Nationalökonomie und Statistik Carl Christian von Weizsäcker: Reply to Mrs. Robinson, Morishima and Wolfstetter, November Carl Christian von Keizsäcker: Substituion Along the Time Axis (preliminary version), February John C. Harsanyi: The Tr~'cing procedure: A Bayesian Approach to Defining a Solution for n-person Noncoo~erative Games, Part I, May Nr. 16 Jnhn C. I'cl 5 "1yi : '.1;'e Tl 8t':i.T9 rll(u~,'.r(':a r:>'l ' a Sol t; on [,)r 11 ~,;r'>un :'c ( C~l '. a y n 1.1 ro~lh to r~li~e r s, "'tfi ing p, 1 t 1 T, Nr. 17 C"oLn ),n ('~, Tl: Pl:O(~t'1 Li, 1,' <pm,,d :!c',,:t ~(s ;'i,'.,jlju 'I:;; Ü-Ltels n('is in Ta' an: fko~c~ctlische Unter~uchung und Proynose, ~1ay Reinhard Selten: l~r. 19 The Crain Store Pra1ox, July Cerl C'listicn von T';ei2.~;-:(;k('r: Politi~~l Li~its of Traditional stabilization Policy, J~re '"',(inha~j Selten: Bargai'Ü'1g tl;:3.er IncOJlplete Infor;atiC'n - :\ ;'\. Ti ca 1 Fx IpIe, July ~'1'. 21 r (T"yi: ';,']y o a '~ (~...l 1':;/4., 1 1 )< c ~ U 1 +. r '...,...) (. > J. -! '1 lii..y? - "r. '2 1..i 1 :,~ r',,' L L ~G tee 1,'"'.;1 s 's l' r ln y, l T\...1Y