Week #7: Distribution of Property

Question 1

A pure capitalist free market

Answer 1

• private property rights
• production for profit
• distribution by market exchanges
• competition

Question 2

Hayek on market efficiency

Answer 2

• markets exchange information
• prices signal shortage and surplus
• profit provides incentive to produce
• so, markets satisfy people’s wants

Question 3

Hakek on Market failure

Answer 3

• markets, by themselves, don’t always function efficiently
• some goods have externalities
• the cost of producing these goods is externalized

Question 4

Rawls :Hypothetical social contract

Answer 4

• Initial hypothetical choice situation

- The original position (OP) models equality of concern

Question 5

Rawls: What principles would POPs choose?

Answer 5

• Principle of greatest equal liberties
• Principle of fair equality of opportunity
• difference principle: social and economic inequalities are justified only if they maximize the benefit of the least off
  (lexical priority, first must be satisfied before moving on)

Question 6

Rawls: An intuitive equality of opportunity argument

Answer 6

• prevailing view: equal opportunity
• choice and circumstance
• natural inequalities are as morally arbitrary as social inequalities

Question 7

Nozick: entitlement

Answer 7

• Distribution need not fit a pattern
• Will Chamberlain argument
  *D1 is just
  *all steps from D1to D2 are voluntary
  so, D2 is just

Question 8

Rawls: Which decision-rule would they use?

Answer 8

• Maximax? No: Maximize the best outcome
• Utility maximization? No: The reason its not rational is because utilitarianism is incapable of recognizing the ‘separateness of persons’
• Maximin? Yes – choose the worst off person and make their situation as great as possible

Question 9

Will Kymlicka – two objections to Rawls

Answer 9

• Rawls is correct to accept the choice-circumstance distinction, so…
• Compensate for natural inequalities
• Don’t subsidize choices

Question 10

Nozick vs. Rawls

Answer 10

• Difference principle is a patterned principle
• Free exchange will create a new distribution
• Difference principle will require interference in people’s lives

Question 11

Taxation: Rawls & Nozick

Answer 11

• Rawls: taxes on wealth need not be invasive
• Nozick: taxation is on a par with forced labour
• Rawls: redistribution can increase the freedom of the poor

Question 12

Assessment of Nozick

Answer 12

• Correctly emphasizes the value of making our own choices
• But fails to deal fairly with unequal circumstances
• Wilt lacks absolute property rights