Reasons for Maximin

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Some Reasons for the Maximin CriterionAuthor(s): John RawlsSource: The American Economic Review, Vol. 64, No. 2, Papers and Proceedings of theEighty-sixth Annual Meeting of the American Economic Association (May, 1974), pp. 141-146Published by: American Economic Association

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2/7

CONCEPTS

OF

DISTRIBUTIONALEQUITY

o m e e a s o n s

o r

t h

Maximin

riterion

By JOHN RAWLS*

Recently

the maximin criterion of dis-

tributive equity has received

some atten-

tion

from

economists

in connection with

the problem

of

optimal

income taxation.1

Unhappily I am unable to examine the

merits

of the criterion

from the

standpoint

of economic theory, although

whether the

criterion

is

a

reasonable distributive stan-

dard depends importantly

on

the sort

of

examination

that only economists can

un-

dertake.

What

I

shall

do

is

to

summarize briefly

some of

the reasons

for

taking

the

maximin

criterion seriously.

I

should emphasize that

the maximin

equity criterion

and

the

so-

called maximin rule for choice under un-

certainty are two very

different things.

I

shall

formulate

the

reasons

for the

equity

criterion so

that

they

are completely inde-

pendent

from this

rule.

In

A Theory of Justice

I

have considered

the maximin criterion as

part

of

a social

contract theory.

Here

I

must assume

a

certain familiarity

with this conception.2

One feature

of it might be put this

way:

injustice exists

because basic agreements

are made too late (Richard Zeckhauser).

People already know their

social positions

and

relative

strength

in

bargaining,

their

abilities and

preferences, and

these con-

tingencies and knowledge of

them cumula-

tively distort the social

system. In an at-

tempt to

remedy this difficulty, contract

theory introduces the notion of the original

position.

The

most

reasonable principles

of

justice

are

defined as those

that would

be

unanimously agreed to in an

appropri-

ate initial

situation that is

fair between

individuals

conceived as free and equal

moral

persons.

In

order

to

define

the original position

as fair

in

this

sense, we imagine that every-

one

is deprived

of

certain

morally irrele-

vant information.

They

do

not

know

their

place in society, their class position or

social

status,

their

place

in

the

distribution

of

natural assets

and

abilities,

their

deeper

aims

and

interests,

or

their

particular psy-

chological makeup. Excluding this infor-

mation

insures

that no

one is

advantaged

or

disadvantaged

in

the

choice

of

princi-

ples by natural

chance or social contin-

gencies.

Since

all are in

this

sense

similarly

situated

and no one knows how to

frame

principles

that

favor

his particular

condi-

tion, each will reason in the same way.

Any agreement

reached

is

unanimous and

there

is

no

need

to

vote.

Thus the subject of the

original agree-

ment

is a

conception

of

social

justice.

Also,

this conception is

understood to

ap-

ply to the basic

structure

of

society:

that

is,

to its major institutions-the

political

constitution

and the

principal

economic

*

Professor of

philosophy, Harvard University. I

am

grateful

to Robert Cooter

and Richard

Zeckhauser

for

their

very

instructive

comments which enabled me to

improve these remarks

and saved me fronm

several

mistakes.

I

See

A. B.

Atkinson, Martin

Feldstein,

Y'oshitaka

Itsumi,

and Edmund S.

Phelps.

2

In economics

this sort of theory was

reintroduced

by James Buchanan and

Gordon Tullock.

I

A similar idea is

found in J.

C. Harsanyi (1953).

141

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3/7

142

AMERICAN

ECONOMIC ASSOCIATION MAY 1974

and social arrangements

and

how

they

fit

together

into one

system.

The

applica-

tion of the maximin criterion to optimal

income taxation is, then,

perfectly

in

order,

since

an income tax is

part

of the

basic

structure.

But

the

maximin criterion

is

not

meant

to

apply

to small-scale

situations,

say,

to how

a

doctor should treat

his

pa-

tients

or

a

university

its students.4

For

these

situations

different

principles

will

presumably

be

necessary.

Maximin

is a

macro

not

a

micro

principle.

I

should

add

that the criterion is unsuitable

for

deter-

mining the just rate of savings; it is in-

tended

to hold

only

within

generations

(Rawls,

sec.

44, pp. 291-92,

Kenneth

J.

Arrow,

1973a,

and Robert

M.

Solow).

But

what alternative

conceptions are

available

in the

original position? We

must

resort to

great simplifications

in

order to

get

our

bearings.

We cannot con-

sider

the

general

case where

the

parties

are

to

choose

among

all

possible conceptions

of

justice;

it is too difficult

to

specify this

class of alternatives. Therefore we imagine

that the

parties

are

given

a

short

list of

conceptions

between

which

they are to de-

cide.

Here

I

can

discuss

only

two

pair-wise

comparisons.

These

are

designed

to

reflect

the

traditional

aim of

contract

theory,

namely,

to

provide

an

account

of

justice

that

is

both

superior

to

utilitarianism and

a

more

adequate

basis

for

a

democratic

so-

ciety.

Therefore

the first choice is between

a

conception

defined

by

the

principle that

average utility

is

to

be

maximized

and

a

conception defined by

two

principles that

express

a

democratic

idea

of

justice. These

principles

read as follows:

1.

Each

person has

an

equal right to

the

most extensive scheme of

equal basic

liberties compatible with a similar

scheme

of

liberties

for all.

2. Social and economic inequalities are

to meet two conditions: they must be

(a) to the greatest expected benefit

of the least advantaged members of

society (the maximin equity cri-

terion) and (b) attached to offices

and positions open to all under coIn-

ditions of fair equality of opportu-

nity.

I assume that the first of these takes prior-

ity over the second, but this and other

matters

must

be left aside. (For more on

this, see Rawls, pp. 40-45 and 62-65.) For

simplicity

I

also

assume

that a

person's

utility

is

affected

predominantly by liber-

ties

and

opportunities, income

and

wealth,

and

their

distribution. I

suppose

further

that

everyone has normal physical needs

so

that

the

problem

of

special

health

care

does

not

arise.

Now

which of

these conceptions would

be chosen depends

on

how the persons

in

the

original position are conceived. Con-

tract theory stipulates that they regard

themselves

as

having

certain

fundamental

interests,

the

claims

of

which

they must

protect,

if

this

is

possible.

It

is

in

the name

of

these

interests that

they have

a

right

to

equal respect

and

consideration

in

the de-

sign

of

society.

The

religious

interest

is

a

familiar historical

example;

the

interest

in

the integrity

of the

person is another.

In

the

original position

the

parties

do not

know

what

particular

form

these interests

take. But they do assume that they have

such

interests

and

also

that the

basic

liberties necessary

for

their

protection (for

example,

freedom of

thought

and

liberty

of

conscience,

freedom

of

the

person,

and

political liberty)

are

guaranteed by

the

first

principle

of

justice.

Given

these

stipulations,

the two

princi-

I

This affects the force of Harsanyi's counterexamples

(Harsanyi, 1973).

I

Part

of the

justification

for these assumptions

is

given

by the

notion of primary

goods. See Rawls,

sec.

15. Of course, there are still difficulties (Arrow, 1973b,

1)

254).



4/7

VOL.

64 NO. 2 CONCEPTS

OF

DISTRIBUTIONAL EQUITY

143

ples of justice would be chosen.

For while

the principle of utility may

sometimes

lead to a social order securing

these liber-

ties, there is no reason why it will do so in

general.

And even if the

principle

often

does,

it would be pointless

to run the risk

of encountering

circumstances when it

does

not. Put

formally, each

must

suppose

that

the marginal

utility

of

these fundamental

interests

is

infinite;

this

requires

anyone

in

the original position

to

give

them priority

and

to

adopt

the two

principles

of

justice.

This conclusion

is

strengthened when

one adds

that the

parties regard

them-

selves as having

a

higher-order

interest

in

how

their

other

interests,

even fundamen-

tal

ones,

are regulated

and

shaped by so-

cial

institutions.

They

think

of

themselves

as beings

who

can choose

and

revise

their

final

ends

and who must preserve their

liberty in these

matters. A free person is

not only

one who has final ends which he is

free

to pursue

or to

reject,

but

also

one

whose original allegiance

and

continued

devotion. to these ends are formed under

conditions

that

are

free. Since the two

principles secure these

conditions, they

must

be

chosen.

The second

pair-wise comparison

is

far

more difficult. In this case

the choice

is be-

tween the

two

principles

of

justice

and

a

variant

of

these principles

in

which

the

utility principle

has a

subordinate

place.

To

define

this variant, replace the second

principle by

the

following: social

and

eco-

nomic inequalities are to be adjusted so as

to

maximize average utility consistent

with fair

equality

of opportunity.

The

choice

between this variant

and the two

principles is more delicate because

the

arguments

from

liberty

can

no longer

be

made,

at

least

not

so directly.

The

first

principle belongs

to

both

conceptions,

and

so

the

operation

of the

utility

principle

is

hedged by

basic

rights as

well as

fair

equality

of

opportunity.

One reason

favoring

the two

principles

of

justice is this. From

the

standpoint of

the

original

position,

the

parties will

surely

be

very

considerably risk-averse;

if

we ask

how risk-averse, we might say not less than

that

of

most

any

normal

person. Of

course,

this is

extremely

vague;

but

if

we

assume

that utility is

estimated from the

stand-

point

of

individuals in

society and repre-

sents,

as

the classical

utilitarians

believed,

a

quantity

ascertainable

independent of

choices

involving risk,

then, given the

crucial nature

of

the

decision

in

the origi-

nal

position, the claims of

the utility prin-

ciple seem

quite

dubious. On the other

hand,

if we

suppose

that utility

is mea-

sured

from the

original position

and takes

account

of

risk,

the

utility

criterion may

not

differ

much from

maximin.

The stan-

dard

of

utility approaches

maximin

as risk

aversion

increases

without limit (Arrow,

pp.

256-57). So, either

way, the original

position

pushes

us

toward maximin. How-

ever,

in

weighing

the second

pair-wise

comparison,

I

assume

that, based on con-

siderations of risk aversion alone, there

is

a

significant

difference between

the two

conceptions. Thus

the problem is

to iden-

tify

other attractive

features of the maxi-

min

criterion that tip

the balance of

reasons

in

its

favor.

First,

much

less

information

is needed

to

apply

the

maximin

criterion.

Once

the

least-favored group

is

identified, it may

be

relatively easy

to

determine

which

policies

are

to

their

advantage.

By comparison

it

is

much more difficult to know what maxi-

mizes

average utility.

We

require

a

fairly

precise way of

comparing

the

utilities

of

different

social

groups

by

some

meaning-

ful

standard,

as well as a method of

esti-

mating

the overall

balance

of

gains

and

losses.

In

application this

principle

leaves

so much

to

judgment

that

some

may

reasonably

claim

that

the

gains

of

one

group

outweigh the

losses

of

another,

while

others

may equally

reasonably deny

it.

This situation

gives those favored

by



5/7

144

AMERICAN

ECONOMIC

ASSOCIATION

MAY 1974

existing inequalities

an

opportunity

to ex-

ploit their advantage so that, as a

result,

inequalities are likely to be excessive, un-

derminingthe justice of the system.

A further consideration is this: a dis-

tributive criterion is to serve as a public

principle. Citizens generally shouldbe able

to understand t and have some confidence

that it is realized. Pattern criteria, those

that

require the actual distribution to ex-

hibit certain ascertainable features, do

well by the test of publicity. Of these,

strict

equality (equal division) is the

sharpest principle.

T

he trouble with pat-

tern criteria is that sharpness is not the

only desideratum, and they often have

little else to commend them. On the other

hand, the utility principle is not sharp

enough:

even if it were

satisfied,

there

could

be little

public

confidence that

this

is

indeed

the

case.

The

maximin

criterion

has sufficient sharpness;

at

the same time

it is

efficient while strict

equality

is

not.

Another

ground supporting the

maxi.

min criterion is based on the strains of

commitment: in

the original position the

parties

are

to

favor those principles com-

pliance

with

which should prove more

tolerable, whatever their

situation

in

so-

ciety turns out

to

be. The notion of a con-

tract

implies

that

one

cannot

enter

into an

agreement

that

one

will

be unable

to

keep.

By

this

test, also,

maximin

seems superior,

for the

principles

chosen would

regulate

social

and economic

inequalities

in the

basic structure of society that affect

people's ife-prospects.

These

are

peculiarly

deep

and

pervasive inequalities

and often

hard

to

accept.

Looking

first

at the situation

of

the

less

advantaged,

the

utility principle

asks

them

to view the

greater advantages

of

others

who have more

as

a sufficient

reason

for

having

still lower

prospects

of life than

otherwise

they

could be allowed. This

is

an

extreme

demand

psychologically; by

con-

trast, the maximin criterion assures the

less favored that inequalities work to their

advantage. The problem with maximin

would appear to lie with those who are

better situated. They must accept less than

what

they would receive with the utility

principle, but two

things greatly lessen

their strains

of

commitment: they are,

after

all,

more

fortunate and enjoy the

benefits

of that

fact;

and insofar as they

value

their

situation

relatively

in

compari-

son with

others,

they give up that much

less.

In

fact,

our

tendency to evaluate our

circumstances

in

relation to

the circum-

stances

of

others

suggests

that

society

should

be

arrangedso

that

if

possible all its

members

can

with

reason be

happy with

their situation. The

maximin

criterion

achieves

this

better than

the principle of

utility.

I

have noted several

reasons that sup-

port the

maximin

criterion:

very

con-

siderable

normal

risk-aversion

(given

the

special

features

of

the original position),

less demandinginformation requirements,

greater suitability as a public principle,

and weaker

strains

of

commitment. Yet

no

one

of

them

is

clearly decisive by itself.

Thus the question arises

whether there is

any consideration

that is

compelling.

I

want to

suggest

that

the

aspirations

of

free and

equal

personality point directly

to

the

maximin criterion.

Since the

principles

of

equal liberty

and

fair

equality

of

opportunity

are

common

to

both

alternatives

in

the

second com-

parison, some form of democracy obtains

when either alternative

is

realized. Citizens

are

to

view

themselves

as

free and

equal

persons;

social

institutions should be

willingly complied

with

and recognized

as

just.

Presumably, however, certain

social

and

economic inequalities

exist,

and

indi-

viduals'

life-prospects

are

significantly

af-

fected

by

their

family

and

class

origins, by

their

niatural

ndowments,

and

by

chance

contingenciesover

the course

of

their

lives.

We must ask: In the light of what principle



6/7

VOL. 64

NO.

2

CONCEPTS

OF DISTRIBUTIONAL

EQUITY

14S

can free and equal

moral

persons permit

their relations

to

be

affected

by

social

fortune and

the natural

lottery?

Since

no

one deserves his place in the distribution of

talents,

nor his

starting place

in

society,

desert

is not an answer. Yet free

and

equal

persons

want the effects of chance

to

be

regulated by

some

principle,

if a

reasonable

principle

exists.

Now when

the maximin criterion

is

fol-

lowed, the

natural distribution

of

abilities

is viewed in some respects as

a

collective

asset.

While

an

equal

distribution

might

seem

more in

keeping

with the

equality

of

free

moral

persons,

at

least

if

the distribu-

tion were

a

matter

of

choice,

this

is not a

reason

for

eliminating

natural

variations,

much

less

for

destroying

unusual

talents.

To

the contrary, natural variations are

recognized as

an

opportunity, particularly

since they

are

often complementary and

form

a

basis

for

social

ties. Institutions

are

allowed

to

exploit

the

full

range of abilities

provided

the

resulting inequalities are no

greater than necessary to produce corre-

sponding advantages

for

the

less fortunate.

The same

constraint holds

for

the inequali-

ties

between

social

classes.

Thus

at

first

sight

the

distribution

of natural

assets

and

unequal life-expectations

threatens

the re-

lations between free

and

equal

moral

per-

sons.

But

provided

the maximin

criterion

is satisfied,

these

relations

may be pre-

served:

inequalities

are

to

everyone's ad-

vantage

and

those able

to

gain

from

their

good fortune do so in ways agreeable to

those less favored. Meeting

this

burden

of

proof

reflects

the value

of

equality.

Now the

maximin

criterion

would con-

form

to

the precept

from

each according

to his abilities,

to

each

according

to his

needs

if

society were

to

impose

a

head tax

on

natural

assets.

In

this

way income

in-

equalities

could be

greatly

reduced

if

not

eliminated. Of course, there are enormous

practical difficulties

in

such

a scheme;

ability may be impossible to measure and

individuals would have every incentive to

conceal their talents. But another difficulty

is the interference with liberty; greater

natural talents are not a collective asset in

the sense that society should compel those

who have them to put them to work for

the less favored. This would be a drastic

infringement upon

freedom.

But society

can

say

that

the better endowed may

im-

prove their situations only on terms that

help others. In this way inequalities are

permitted

in

ways consistent

with

every-

one's

self-respect.

I

have

attempted

a

brief

survey

of

the

grounds for the maximin criterion.

I

have

done

this because

historically

it has

at-

tracted little attention, and yet

it

is a

natural

focal

point between

strict

equality

and

the

principle

of

average utility.

It

turns out

to

have

a

number

of

attractive

features.

But I do not wish to

overempha-

size

this criterion:

a

deeper investigation

covering

more

pair-wise comparisons may

show

that some other

conception

of

justice

is more reasonable. In any case, the idea

that economists may

find most useful

in

contract theory

is

that of

the

original po-

sition. This

perspective

can

be

defined

in

various ways

and

with

different

degrees

of

abstraction

and some

of

these

may prove

illuminating

for

economic theory.6

REFERENCES

K.

J.

Arrow,

Rawls's Principle of

Just Sav-

ing,

Instit. for Math. Stud.

in

the Soc.

Sciences, Stanford, tech. rep. no. 106, Sept.

1973a.

Some Ordinalist-Utilitarian

Notes

on

Rawls's Theory

of Justice, J. Phil.,

May

1973b, 70, 254.

A. B.

Atkinson, How Progressive

Should In-

come

Tax

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Reasons for Maximin